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FINANCIAL H 




Y 


Hong^Kong economy: 
^ a boom made 

r— ' in China, Page 20 


No. 30,334 


EUROPE’S BUSINESS NEWSPAPER 

Friday September 11 1987 


D 8523 A 


Werlef News 


Iran will 
support 
Saudis on 
oil price 


Business Summaiy 


London SE 
to impose 
£1 fines 
on backlog 


Aquino faces problem of corking the military genie 


BY RICHARD GOURLAY M MANILA 

PRESIDENT Corazon Aquino of the overthrow of her Govern- he and about 1,000 men were cause they had tried to join the 


the Philippines faces a critical meat- 
iest of her leadership alter snr- But Mrs Ac 
viving the fifth and easily most are not with t 
serious attempt to topple her in largely still he 
a coup. they are with 

The latest political crisis has which helped 
led to the mass resignation of the first place. 


ment. holed up. "Loyal” government 

But Mrs Aquino's problems troops showed very little inters 
are not with the public, which est In capturing the mutineers, 
largely still hero-worships her - He left behind a military 


sled up. "Loyal* government coup leaders on August 28. 
oops showed very little inter* In each successive attempted 
it In capturing the mutineers, coup, the mutineers have 
He left behind a military claimed that they were not in- 



ou price on uacKiog ■ s -ss^KsrjffiS 

SSSSSTJtffiSBMK EFlSiS’Cls 

support of an oil price of $20 a nay for each transaction dating jggjnj ^Snlfln? to look Ukfr a 
barrel despite acute tensions torn tee time of Big Bang if they “ ““ 

between the two states. fail to settle within six weeks. P AouinStried to nresenta 

The indication came as fight- Some members had lobbied for stro5«fa2d^eeisivelSce^ter- 
ing in the Gulf war intensified fines' 'up to £30 to encourage 

. SK , s?s^ t ssssraf l s 

General Javier Perez de CuS TOPPER prices reached fresh 

lar. Page 22 4’A-year highs on the London weekend. She appealed on texe- 

Uetai Exchange yesterday as vision for public help to prevent 

New Namibia hope ttc ° r ^ New York ; 

Assistant US Secretary of State ““ _ _ A MgTAVI^ 

for Africa Chester Crocker left COppGf / m I RJ#-* ill 

Luanda, after meeting Press- ' Cash high grade (£ per tonne) JL M.K WV KK I 

dent Jose Eduardo dos Santos, C J 

to consider, new Angolan pro- 1 ’ : < : ;; ',< < :i* : '■ 

posals which diplomats said m* * 

had raised hopes of progress to- i - ' 1 

wards a Namibia settlement. " -Vi**' ■£' ' I 1 j 

Pope arrives in US - 1100 

~ 4 <vw' • JvtfX •/'/. > ; „W .. av m *1 

The Pope arrived in'Mihmi for a :?&'■#. i' ■■■ __ U 1 ~ M 

nine-day tour of the US. '?■/, ||W1 I 

Pakistan blast deaths inso 

bytim coone in buenc 

when a bomb exploded in a j'.ma ul,- ?■ s .-- 

tadt market in Lahore, Pakia- . PRESIDENT RAUL Alfbnain 

tell. -. r.. . ■ ■Ul * 1 k«e AhuhIiiio twill amah- in 


they are with the armed forces which increasingly identifies terested in toppling Mrs Aquino 
which helped her to power in with his cause - less 'coddling* but wanted to see alleged Com- 
the first place. of Communist insurgents by the munist sympathisers removed 

Even if she handles the re- Government, more recognition from the Cabinet and a tougher 
shuffle perfectly, by successful- for the soldiers both in pay and stand taken against the msur- 


ly balancing the demands of the conditions and a greater 
radicals and the pragmatists in tary say in the civilian Gc 
her Government, the most diffi- menL 
cult task still lies ahead: to As a reminder of who Uu 


md it ions and a greater mill- gents. 

try say in the civilian Govern- Most observers believe that 
enL the Cabinet problem is not so ^ 

As a reminder of who the real much Co mm u n ist sympathisers 


work out why her military has enemy is, the Communist-led as policy obstruction by close 
been so consistently mutinous New People’s Army this week advisers to Mrs Aquino, partacu- 
and then try to tackle Its a pall- cut road links between Manila larly Mr Joker Arroyo, the Exec- 
ute inefficiencies. and a 100-mlle long peninsula utive Secretary, widely cnti- 

The leader of last month’s by blowing up three key bridges cised for both incompetence 
abortive coup. Colonel Gregorio on successive days. Instead of and left-wing sympathies. How- 
Honasan, slipped easily away reinforcing the region, 100 sol- ever, Mrs Aquino appears to be 
from the military camp where diers had to be withdrawn be- Continued on Page 22 



PfB 

k -rv- > 


inso 

" - 


Argentina attempts to 
freeze interest rates 
on $54bn foreign debt Sr 


down 


Military feel Mrs Aquino has been "soft” on the Communists 

US believes most 
weapons-treaty 
hurdles cleared 


_ 4 , BY QUENTIN PEEL IN BRUSSELS AND 

THE VALUE of imports into Ja- ROBERT HAUTHNER IN LONDON 
pan soared by a third last month 

as the strengthened yen finally THE US considers that most ment by Chancellor Helmut 
began to have a strong impact maj or obstacles to the early Kohl of ■ West Germany that 
on the country's trade. conclusion of an agreement be- these missiles, which are 


' " . Z- iF'i- 7 "! PRESIDENT RAUL Alfbnsin 

has said Argentina will seek to 
_ , . . lOOO interest rates on its 

Yugoslav Strike wave Aug 1987 Sep $54bn foreign debt 

Some 5.006 Yugoslav machine '• Uis speech, delivered on 

plant workers, went on strike, market boosted London prices 
joining a wave of unrest-over in- for the fifth trading day in sue- strongest public 
fiation arid low pay: : cession. The cash Grade A posi- _ tateraaUwual Monetary 

b " — k SaftaJJ? 4 “ P a ‘ “■"* a P n^re d t£flS& M .ofa 

Rnnnlndpsh md ntedoe tonne. Page *4 in a»nanimMi 


BY TIM COONE IN BUENOS AIRES as the strengthened yen finals 

began to have a strong irapaci 

BSIDENT RAUL Alfbnsin tic positions which, instead of nomic team on the fall in - on the country's trade, 
said Argentina will seek to facilitating the development of commodity prices and the rise The imports surge drove the 
szfi interest rates on its peoples, only bring them stag- in interest rates payable on the gantry's trade surplus down to 

bn foreign debt nation and paralysis". foreign debL He then an- $5.i5b n OD a customs-cleared 

[is speech, delivered on The announcement gave no noiwced his intention to seek a basis, 31 per cen t lower than in 
dnesday night, contained his indication of what sanctions the freeze on interest rates "to de- August 1988. 

ingest public attack yet on country might impose if the fend, the interests of the Argen- . on the Tokyo foreign ex- 


conclusion of an agreement be- these missiles, which are 
tween Washington and Moscow equipped with US-controlled 
on the world-wide elimination warheads, would be disman- 
of medium-range missiles have tied, had liquidated that issue.* 
now been removed, two of Pres- But the Soviet negotiators were 
ident Ronald Reagan's top offi- still insisting that any interme- 


banks or IMF refused to accept tinian people.* 


Bangladesh aid pledge 

Britain promised $8m m -emer- 
gency aid for the homeless left, 
by Bangladesh Hoods. 

Reagan Contra plea .. 


totmeTpage 14 ^ • It gave the first indication of a 

^ shift of emphasis in government 

WALL STREET: The Dow Jones economic policy since the heavy 


Argentina's proposals. But 


Mr.De La Faente called for a 1 


message was clear that Argen- drastic change in the direction 

fS«A*n MAifnlkfttinrt MfAral#) * 0 \f oiiAnAmia • VWilimr Inflivel I U 


- On the Tokyo foreign ex- 
change market the figures lifted 
the dollar, but they came too 
late to have an impact on the 


cials said yesterday. 


diate-range nuclear 


In another sign of the momen- agreement must refer to them. 


turn for a missile deal, Presi- 


mterview 


dent Reagan is to hold 'substan- Guardian yesterday. Mr Viktor 


tina'B negotiating stance would of economic policy. Industry Tokyo stock and bond markets, Hve* talks with Mr Eduard Karpov, the Soviet Foreign Min- 

k. ..•■wtaatiall* naoilarf >n iriannuie intsmal . - . ■ _ _ . I Khaufln!nnil7D fha Snviat. 17nr. istrv s chief arms control advis- 


industrlal average closed 28.78 1 defeat suffered at Sunday’s 
up at ^516.05. Page 46 polls by the ruling Radical Par- 

LONDON: UK securities opened • 


which were weaker. . 

Japanese trade officials said 


President Alfonsin said the 


more brigfatly but were unable Government would immediately 
to extend early gains as invest- begin *a campaign^, in a perma- 


Secretary . of State George ' to extend early gains as invest- begin 'a campaign— tn a perma- 
Shuftz w »id - President Reagan Jnent institutions stayed away, nent search for the freezing of 
wanted the US Congress to ap- reluctant to take -positions be- interest rates at historic levels”, 
nrave S270m over 18 months in fore the release of US traae da- in a television Interview 


wanted the US Congress to ap- 
prove $270m over 18 months in 
aid for Nicaraguan Contra reb- 
els. Page 6 


China death sentences 

A Peking court sentenced -six 
people to death for taxi rob- 
beries. 


fore the release pf US. trade da- xn a television interview 
ta. The FT-SE index was up 41 shortly before the elections, he 
at 2^532 and the FT Ordinary had defined "historic" interest 
index rosd 5i2 to L76L3. Details, rates as "2 to 3 per cent per an- 
Page42 num in real terms”. 


. __ _ , J,,,!, th-4 Uts Hit .X.WMUUUV w/ wa uomaMv ”«V *a* y*«* — ^ 

moved lower on TomOnr that c j es Q f lbe commercial banks, De La Fnente, president of the the IMF- -. 

1 ° e y illl ^ ac ? • Jap ?° cs t the World Bank and especially' Argentine Industrial Union, set Just last month, Argentina 
iheTMF, which had iinpqsed"ri- -aside hisr prepared speech an finalised loan agreements with 
taflures similar to those of Tate- " ' ' W^dniMHlAv nivht and. in a oner- its creditor banks to reschedule 


Military ruler MengUb* Haile 
Mariam waseteeted.uncrpposeif 
. as first presittent of the new 
People's Demoerafic Republic , 
of Ethiopia. . 

EC aid for Africa 

The European C omm i s sion pro? 
posed- a '■ SH5m two-year pro- 
jgramme to help the' poorest 
countries of sub-Saharan AM-. 

Chile powers renewed 


rTS ,r^TT dkulous recipes*. .; , Wednesday night and. in a qtter- 

ho. AWfough toe .Future agreements *WouId no ulous voice, blamed the prob- 

■InSnSe^d ■ Jon ^ erbe ^anachrenis- .lems encountered by his ec<k 


be substantially hardened. needed *a vigorous internal which were weaker. . 

President Alfonsin was mak- market* as a basis for growth Japanese trade officials said 
ing-his first public appearance and export expansion. Policies the sharp increase in imports 
on Wednesday since the elec- of import substitution, a lower- reflected the impact of the 
tion. in which the opposition ing of interest rates and an end strong yen on trading patterns, 
Peronist Party made a come- to the 'monetarist culture” were the effect of Japanese invest- 
back. necessary to re-establish inves- ment In plants abroad and offi- 

- One result of the election, and tor confidence. dal efforts to open toe Japa- 

. offers of resignation by Cabinet Reflation of the economy, nese market 
ministers on Monday night, is through a stimulation of domes- jt was the fourth successive 
-uncertainty whether Mr Juan tic demand, is also one of the monthly decline in the trade 
Sourouille will continue much proposals put forward by econo- gnrpius. The value of imports 
longer as Economy Minister. mists linked to the Peronist Par- last month rose 323 per cent to 

President Alfonsin, visibly ly. Such proposals, however, «i2.4bn, while that of exports 
.upset by a lengthy attack on his clash directly with those made rose on j y 4.4 per cent to 
.economic policy by Mr Eduardo -by Argentina's ' creditors and $i7.58bn. 

De La Fuente. president of the the IMF. Japan's surplus with toe US 

Ai^entine Industrial Union, set Just last month, Argentina fell to 63.71m. 15 per cent lower 
aside . his: prepared . speech an finalised loan agreements with than in August 1988u It was the 
Wednesday night and, in a quer- its creditor banks to reschedule first year-on-year drop in the bi- 
ulous voice, blamed the prob- rjratinopd nn Paw 22 lateral surplus for five months. 

lame aniuinntnail hv hie ann. WHUiimCH *"6 C e>_ L. TTP ™-i i i a 


on Wednesday since the elec- of import substitution, a lower- 
tion, in which the opposition ing of interest rates and an end 
Peronist Party made a come- to the 'monetarist culture” were 
back. necessary to re-establish inves- 

- One result of the election, and tor confidence. 

.offers of resignation by Cabinet Reflation of the economy, 
ministers on Monday night, is through a stimulation of domes- 

- uncertainty whether Mr Juan tic demand, is also one of the 

Sourouille will continue much proposals put forward by econo- 
longer as Economy Minister. mists linked to the Peronist Par- 


Page 42 ... num in real terms". : President Alfonsin, visibly ly. Such proposals, however, 

in Wednesday joint's, speech .upset by a lengthy attack on his clash directly with those made 
TOKYO. Equities and .ponds j, e criticised lending poll- .economic policy by Mr Eduardo by Argentina's creditors and 


Shevardnadze, toe Soviet For- istry's chief arms control advis- 
elgn Minister, at the White er. said Moscow was insisting 
House next Tuesday. The meet- some 400 Pershing 1A warheads 
ing, which had been expected, held on American soil, in addi- 
will give the President the op- tion to the 72 in West Germany, 
portunity to discuss progress in must also be destroyed, 
the arms control negotiations However, Mr Nitze, who was 
before Mr Shevardnadze has briefing Nato ambassadors on 
further with Mr George the latest state of the Geneva 

Shultz, the US Secretary of arms talks ahead of next week's 
State. meeting in Washington between 

At separate press conferences Mr George Shultz, the US Secre- 
iw Brussels and Washington re- tary of State, and Mr Eduard 
spectively, Mr Paul Nitze, chief Shevardnadze, his Soviet oppo- 
arms control adviser to the site number, underlined the 
President, and Mrs Rozanne US's position that the talks 
Ridgway. Assistant Secretary of were about missiles, not war- 
state for European Affairs, heads. 

were optimistic about the pros- "We think they have created 
pects of a superpower deal, some artificial problems which 
while strewing that technical must be got out of the way," he 


jnjfower turnover. Page 46 . _ 

GOLDrose in London to $460.00 
from $457.50- It also rose in Zur- 
ich to $46035 from $458Z5. Page 
34 

DOLLAR closed in New York at 
DM1.80525, Y142.45, SFrl.4935 
and FFr6.0425. It rose in Lon- 
don to DM1A065 (DML7965h 
FFr 6.0425 <FFr6.0125); 

SFrL495G (SFrL4870); and to 
Y142.60 CY14L55). On Bank of 


lateral suralus for five months, wmie stressing taat tecnmcai must ue oui 01 uie way, ne 
^StstotoSuSweredowplA details still remained to be Ued suiL ?re optteisijc we can 
ner cent to S639bn. while im- tip. _ . work it out if the Soviets wish to 


US telephone restrictions 
eased by federal judge 


BY JAMES BUCHAN IN NEW YORK 


Chilean President Auguste Pin- England Of^esthe in- 

ochet prepared to celebrate toe Jex rose to 1008 from 100.4. 
14th- anniversarv of Hii coup by F*g® 56 


ochet prepared to celebrate the 
14tb anniversary of His coup hy 
renewing; emergency, powers 
that allow him to exile oppo- 
nents or banish them IntemaZly 
without v. trial Pinochet’s grip, 
page6 ••••.: ; •/ 

Kabul ^ultputcldser 

Afghanisten arid PafcLstari had 
narrowed, differences - over a 
timetable for toe withdrawal of 
Boviet troops from Afghanistan, 
a UN ofifirialisaid. Page 4 

Plea to Colombia v 

Amnesty lnteroational said it 
had .asked- Colombia for an ur- 
gent investigation of the muider 
of two leading human rights ac- 
tivists.'' 

Burundi leader 

Burundi coup leader Pierre Bu- 
' yoya was named as president 
and met leaders of neighbour- 
ing states to seek recognition. 

Sihanouk welcome ~ 

■Cambodian Premier Hun Sen 
said exiled- Prince Norodom Si- 
hanouk would be welcome to re- 
turn. . ' 

Calcutta ridts 

At least 60 people were injured 
when Indian police fired in the . 
air and defoliated tear-gas cafo 
isters to disperse thousands of 
Stone-throwing ; • demonstrators 
pretesting s! plans to redevelop, 
a Calcutta park 

Ba$hford dies at 72_ 

Pat Bashford, former leader of 
Rhodesia's multiracial' Centre 
-Party, died in Harare, aged 72. 


US REGIONAL telephone com- enter toe longdistance market modify services, is beneficial," 

panies. broken off from the still dominated by AT & T. ^ said one analysL 

American Telephone St Tele- He said that the companies’ ; in explaining his continued 


Pare Its™ ~ American Telephone St Tele- He said that the companies in explaining his continued 

graph company in. 1984, were monopolies over local tele- restrictions, Jndge Green said 
STERLING closed in New York yesterday permitted by a Wash- phone lines would still give that if the regional companies 


said one analysL 


per cent to $8B9bn, while im- 
ports -from 'the US rose 27.5 per 
cent to $2.68bn. 

The surplus with the Europe- 
an Community fell 14.5 per cent 
to $L38bn.Tm ports from toe EC 
were up 19.8 per cent, while ex- 
ports rose L4 percent 
■ Mineral foels, where imports 
were up 45 per cent to $2L2bn in 
the month, led the surge in bn- 1 
ports, reflecting mainly the in- 
crease in oil prices this year. A 
sharp rise was also seen in ma- 
chinery imports, ap 37.8 per 
cent to $lJ5bn, indicating the in- 

Con tinned on Page 22 


. They were also hopeful that work it out' 
an agreement on the reduction He said two issues still 
of long-range strategic nuclear needed to be worked out in de- 
weapons could be reached in foil by negotiators in Geneva: 
the near fixture. Mrs Ridgway inspection and verification of 
even said such an accord could the disarmament agreement, 
be concluded before President end the timetable for toe phas- 
Reagan left the White House at ing out of the missiles by both K 


the end of 1988. 

At the same time, Mr Nitze ac- 


sides. 

Mr Nitze declined to give any 


at $L64625. It fell in London to 
$1.6450 ($1-6510). It rose to 


in federal judge to offer toe them an unfair edge in these were allowed to sell inform a- 


DM2L9725 (DM24650); FFr9.9400 formation services. 
(FFr9.9275); SFr2.4600 "In a major rullr 

(SFr2.4550>: /. and Y234.50 freed the seven reg 


c advanced electronic in- businesses. 


tion services, they might be 


But Judge Greene, who over- tempted to limit foe access of 


SFr2.4600 in a major ruling; the court sees the anti-trust settlement competing information provid- 
Y234.50 freed the seven regional compa- reached between AT St T and ers to their local networks. 


(Y233.75j. Tbe pound's exchange nies, known as the Baby Bells, toe US Justice DepartmenL did Meanwhil „ allowing them to 

rate index was unchanged at to ■ transmit information ser- drop hxs insistence that the Ba- t ^ manufactming and 

72^. Page 35 vices, such as videotex, down by Bells reek toe court’s a p- mSSSjTwoiiB 

„ foeir local networks. . proval before entering busi- 

BRITANNIA Arrow Holdings, Riitjndm Harold Greene, in a nesses outside ^ L ° . p etltive 


cused the Soviet Union of rais- likely timescale for a conclu- 
ing new last-minute 'artificial sionofthe negotiations because 
problems" over the removal of a "lot of detail was left to be re- 
the warheads on 72 Pershing 1A solved.” Nevertheless, toe two 
missiles owned by West Ger- delegations were already work- 
many. ing on a joint draft text of an 

Mr Nitze said the announce- agreement 




... their local networks. . proval before entexinj 

BRITANNIA Arrow Holdings, But Jndge Harold Greene, in a nesses o 

UK financial services group, is lemfoy ruling regarded as his telecommunications, 
to buy County UnitTrustlfon- significant since he ap- Although the Baby 


to.bny pounty UnitTrusLMan- significant since he ap- 

agers. National Westminster pEO ved the break-up of AT&T's gained only 
Bank’s _nrattrnst business, for system monopoly, rejected terday, Wa 
£41J9m;($68.5m) in cash, ragezs tne Baby Bells’ requests to gen- favourably. 

• • L. than. >Anufhina 


proval before entering busi- 

naccpc outside rc-c reale tlie Bnti“CompeLitxve 

telecommunications. conditions ofthe old system. 

Although the Baby Bells "The regional companies 


w 


refres, to C manufoeSre°telreom- operating companies to go into that the Bell System possessed 
HESS caSSSSBt SSSSi. equipment and vKadded, rather than com- before foe break-up," he said, 
man, have been charged by the — ; 

Sjpand rmrd^replng^riola- IMF optimistic for ’88 growth 


gained only partial success yes- would have the same incen- 
terday, Wall Street responded fives, as well as toe same means 
favourably. for discrimination, manipula- 

"AnvthinK that allows the Bell tion and cross-subsidisation 


’Anything that allows the Bell tion and cross-subsidisato 
era ting companies to go into that the Bell System possess 
lue- added, rather than com- before 1 foe^ break-up,” he said. 


IMF optimistic for ’88 growth 


CANADIAN Pacific, transporta- THE IMF takes a relatively opti- ure still represents an accelera- 
tion. resources and industrial mistic view of the world econo- lion from the 2.4 per cent 
conglomerate, will concentrate ^ j n iggg b U t it believes that growth rate that the Fund now 
on developing its four core sec- large trade external imbalances expects for 1987. 
tors and has no acquisitions in remain the greatest threat to a ] a | pc ^ predictions are 

sustained recovery^ AP-Dow in the IMF's semi-an- 

lts C$500m (US$378m) in cash, jeneg reports from Paris. nual economic outlook. 

***** 23 The Fund's view that the mo- which has been distributed to 

MONTEDISON, Italian cbemi- me ntemuf growth will be main- member governments before 
r-nie, - pharmaceuticals, energy tamed in the near term con- toe joint annual aovworia 
and' financial services group, .trasts with fears voiced by some Bank meetings in Washington 
last night unveiled a 15.9 per economists that toe five-year- later this month, 
cent drop in its gross operating old world economic recovery xhe IMF says economic activi- 
profit for the first six months of may be fizzling out ty is being underpinned by po- 


The IMF says economic activi- 
ty is being underpinned by po-- 


to 2.7 per cent from a previous 
forecast of 3.1 per cenL A 
growth rate of 2.4 per cent is ex- 
pected in 1987. 

The IMF has revised upward 
its growth estimate for West 
Germany to L5 per cent in 1987 
and 2J3 percent in 1988 from L9 
per cent and 2.0 per cent re- 
spectively. Growth in Japan is 
also expected to be slightly bet- 
tor than was thought earlier this : 
year: 3.2 per cent in 1987 and 3.4 1 
per cent in 1988. 

But the DCF has cut back its 1 


1987, to L739bn ($565m). Page 23 The Washineton-based organ- ord mated policy changes made growth forecast for France to 

4SI. SECURITIES InterMttoD- izS^iTadmitethat its «SSo- artier this year by main m- L5 per in 1.8 per 

A^IA SKCIJK1 Mia iniernanon- scaled back their dustnalised countries ana cent in 1988. Britain's rate of ex- 

«*•' Ho“S forecast for inflation-adjusted these should help to improve pansion is expected to drop to 

«WH L-LSSfflSStt toe iSSSSri^TcoS business confidence and sus- 2.2 per cent in 1M8 from 3^ per 

$old 100m shares in^neseEsj ©fowto %“ e to “ a 6 u ^ r a ^ l, ? 1 . tain demand. cent this year, while that of Italy 

totes, property group confootod ^ percent rate The IMF has scaled back its will remain relatively steady in 

itr»2K9ra) before they had estimated last spring. projecUon for real gross nation- both years at around 2.5 per 
However, the revised 1988 fif^ 5l product in toe US next year cent - 


istrialised countries and cent in 1988. Britain's rate of ex- 
ese should help to improve pansion is expected to drop to 
isiness confidence and sus* 2.2 per cent in 1988 from 3uJ per 
in demand. cent thisyear. while that of Italy 

The IMF has scaled back its will remain relatively steady in 


BANK MELLI IRAN 

P.O. Box 11365-171 , Ferdowsi Avenue, Tehran, Iran 

The Largest Commercial Bank 
in the Middle East 

IS PROUD TO ANNOUNCE ITS 59TH ANNIVERSARY 

Capital and Reserves 35,101 

Total Deposits 2,487, 900 

Total Assets less Contra Accounts 2, 916,410 

(Figures in million Iranian Rials as at 20.3.86)* 

Bank Melli Iran offers a complete range of domestic and international 
banking services through its 1,600 Branches in the Islamic Republic of 
Iran, correspondents worldwide and an extensive branch network 

abroad. 

INTERNATIONAL NETWORK 


JEnrope^ r^^ 
. Companies „ 
■ America. 

. Companies .. 

Overseas™ 

■ C w npifflffii L 
World Trader 
Britain. — ~ 
Companies J 


Agrfcuttnrc - . 

Arts -Reviews — 

. World Guide . 
Ctamsdititf— — 


72. costs. Page 24 

ONTENTS— 

, Crasswwd— . 


Crvssward »■■■■ , » 

Caneneies — 

Editorial cauuneat — . 

EanAoa fr- . — 

Earwpdims — 

Financial Futures — — 

GeM , 1 1 ."T ** ** *** ” 

lulL Capital Martels — 

Letters — ■ 

Lex- — 



atarket Monitors - 

Men and Matters ^ 

Money Markets 

Eaw Materials ■■■■■ 

Stock markets - Banries . 

-WaH Street- 
- Landoa..—.. 
Teehnolagy 

Unit Trusts — — ^ ~ 
Weatto - —- ■ ■■■— — - — r 
World Index — — — 


43,46 

4M6 

.39-4346 



CHILEAN 

MILITARY 


Iran: factions within the regime 4 

Management: profit-related pay ........ 12 


Technology: mixing 
superconductors ... — 


• with 
12 


STRONGMAN Hungary: survey 


CELEBRATES 

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General Pinochet’s regime shows 
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Editorial comment* Brazil places a 
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West Germany: Mr Strauss waits for 
news — .. — — ... 21 

Lex: Rolls Royce; Rowntree: Burmah: 
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First City Bancorp: rescue may resolve 
Texas bank — - — 23 


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AMERICA AND FAR EAST London 

UNITED KINGDOM London Branch, 
Kensington Brandi 

WEST , GERMANY Hamburg Branch, 
. Frankfurt Branch, Munich Branch, 
Dusseldorf Branch 
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2 


Financial Times Friday September 11 1987 


EUROPEAN NEWS 


Eta bombs seen 

to 

arrests 


as reply 
wave of 

BY DA VIP WHITE IN MADRID 

TWO fresh terrorist attacks in 
the Spanish Basque country 
were seen here yesterday as the 
reply by hard-line leaders Of the 
Eta organisation to recent 
arrests and to the Madrid 
Government's renewed attempts 
to persuade Eta members to lay 
down arms. 

In the first attack at Guernica, 
east of Bilbao, on Wednesday 
night, two Civil Guards were 
killed by a remote-controlled 
car bomb containing 20 kg of 
explosive and shrapnel. 

Coming after the shooting at 
close range of a Civil Guard 
officer in Bilbao on Tuesday, it 
brought to 42 the total of deaths 
in the Basque conflict since the 
beginning of the year, indud- ' 
ing 21 killed by an Eta car 
bomb at a Barcelona hyper- 
market in June. 

The bombing was fallowed by 
a rocket attack against a civil 
guard barracks at Ordizia, south 
of San Sebastian, yesterday 
morning. There were no victims, 
bowever. 

A separate terrorist attack 
at a court near Lerida in north 
east Spain, in which a 60-year- 
old widow living next door was 
killed, was claimed by Terra 
Lliure, a small Catalan group 
believed on some occasions to 
have collaborated with Eta. 

Eta bad been .expected to 
make a show of force after the 
arrest at the weekend of three 


alleged members of its so-called 
Barcelona Commando, held 
responsible for the hyper- 
market bombing. This was the 
third big breakthrough claimed 
by Spanish police following 
successful operations against 
Eta units in Madrid and San 
Sebastian. 

Madrid police have been 
on special alert and the co- 
operation of tbe general public 
has been sought in order to 
head off a possible action in the 
capital, with the reported 
presence in Madrid of one of 
Eta's top figures, Mr Jose Luis 
Urrusolo Slstiaga. 

Tbe renewal of Eta activity is 
also seen as underlining the 
organisation’s public rejection 
of bolding ceasefire talks on the 
Government’s terms, which 
clearly exclude political con- 
cessions. The offer of talks, 
first made in 1984, was repeated 
by Mr Felipe Gonzalez, tbe 
Prime Minister, two weeks ago, 
and the Government later con- 
firmed for the first time that 
contacts with Eta had been 
held. 

Eta, however, issued a com- 
munique criticising the lack of 
concrete proposals and the 
“ intransigence " of Spanish 
officials in the three meetings 
with exiled Eta figures which 
it said had taken place in 
Algeria since last November. 


Soya fink to Barcelona 
asthma attacks confirmed 

BY OUR MADRID CORRESPONDENT 


TEE HEAD of a medical team 
investigating an outbreak of 
severe bronchial asthma attacks 
in Barcelona, in which four 
people have died in the last 
week, has confirmed the exis- 
tence of “a very significant 
relationship ” between the 
phenomenon and the unloading 
of bulk soyabean shipments. 

Dr Josep Asto was. however, 
quoted by the Barcelona news- 
paper La Vanguardia as saying 
that the chances of a further 
outbreak were " remote ** and 
that the conclusions of the 
investigation had “nothing to 
do with human or industrial 
consumption of soya” which 


was regarded as a safe product 

The unloading of a 80,000 
tonne cargo of US soyabeans 
from the Liberian-registered 
vessel Argus Traveler was 
halted half-way after the out- 
break last weekend. However, 
health authorities have allowed 
three companies engaged in 
processing soyabeans in the 
area to resume activities other 
thaw unloading. 

The allergy problem, which 
it is thonght may be linked to 
dust from the shipments, has 
affected some 200 people who 
already suffered from respira- 
tory troubles. About 26 were 
still in hospital yesterday. 


Chirac delays bid to tighten nationality law 


BY IAN DAVIDSON 

the GOVERNMENT of Mr 
Jacques Chirac has, in effect, 
postponed until after next 
spring's presidential elections 
its earlier commitment to 
tighten up France's nationality 
laws, to the relief of the 
centrists in the governing coali- 
tion, to the delight of the 
opposition Socialist Party, and 
the rage of the ultra-right wing 
National Front party led by Mr 
Jean-Marie Le Pen. 

In its election platform last 
year, the Gaullist party and its 
centrist allies attempted to 
ward off the anti-immigrant 
camp ai g n of the National 
Front by proposing to tighten 
up access to French nationality. 
Under the existing 1973 law, 
nationality Is acquired virtually 
automatically by virtue of birth 
in France. 

The new draft law, put for- 
ward by the Gaullists a year 
ago, proposed that the child of 
a foreigner, born in France, 
could only acquire French 
nationality by applying for 


naturalisation between the ages 
of 16 and 20, ami swearing 
allegiance to the French state 
and constitution. The applica- 
tion would be refused if the 
applicant had been condemned 
to more than six months in 
prison, or failed to demonstrate 
sufficient knowledge of the 
French language. 

The proposal followed another 
anti-immigrant move by the 
Government in the sumuer of 
1986, intended to make it easier 
for the authorities to expel 
foreigners from France, on tbe 
grounds of being a threat to 
public order, if condemned to 

more thaw fpr mnntha in prison. 

Though softened during its 
passage through parliament, the 
draft law was still judged in 
conflict with the constitution 
by the ConseQ ConstitutionneL 
Yet within six weeks of its 
adoption in Its final revised 
form, the new law was invoked 
to permit the expulsion of 101 
citizens of Mali. 

On the question of the 


nationality law, however, the 
Government has been showing 
increasing doubts since tie 
beginning of this year, mainly 
because of the reluctance of 
centrist members of the coali- 
tion to go down a road which — 
though no doubt popular with 
a substantial proportion of the 
French population — would be 
at variance with a long French 
tradition, and would expose the 
Government and especially the 
Gaullists to attacks from the 
Socialists on grounds of human 
rights. 

In June, Mr Chirac sought to 
escape from the contradictory 
pressures on the nationality 
issue from the Front National 
on his right, and his coalition 
partners in the DDF an his 
left, by setting up a special 
commission of 16 wise men, 
beaded by Mr Marceau Long, 
vice-Fresident of the Conseil 
d’Etat, to examine the whole 
question from the bagfanfng. 
Yet there remained consider- 


able doubt whether the Chirac 
Government still intended tn 
press ahead with a tijftte rung 
up of the nationality law before 
the presidestial elections next 
spring. 

That doubt now seems to have 
been removed. Earlier this 
week, Mr Chirac indicated that 
the issue would be postponed 
until after the presidential, 
elections unless the commission 
of 16 wise men should show that 
there was a general consensus 
on the question. 

Unless it comes up with some 
unlooked-for judgment of 
Solomon, it seems unlikely that 
tbe Government will be nble to 
return to the attack before the 
presidential elections. &xch a 
move might appease voters 
from the National Front to Mr 
Chirac’s right, but it would 
band an additional weapon to 
his more important opponents, 
Mr Raymond Bam in the 
centre, and (probably) Presi- 
dent Francois Mitterrand. 


Italy’s Gulf task force awaits 
confirmation of departure date 


BY JOHN WYLES IN ROME 

THE EIGHT-VESSEL task force 
which the Italian government has 
assembled to aid freedom of naviga- 
tion through the Gulf stands ready 
to saO, But after a day and a half of 
Parliamentary debate and stiO 
more to come, it is not yet known 
when the three minesweepers, 
three frigates and two support 
ships will get underway. 

In some corners of the capital 
there are doubts about whether 
they ever will, and if so, whether 
they will actually arrive. 

Late on Wednesday night, the 
five party coalition government 
comfortably secured a Senate vote 
of confidence on the issue and it 
faces a second vote in the lower 
House on Saturday. 


Assuming that this is won, all po- 
litical pretext for delaying the task 
force's departure will have evapo- 
rated. However, the Defence Minis- 
ter, Mr Valerio Zanone, has refused 
to namo the day, saying that he 
must consult the prime minister, 
Mr Giovanni Goria who spent yes- 
terday meeting his counterparts in 
The Hague and Madrid, 

The principal reason for expect- 
ing a delay, or an e xt remely slow 
passage down to the Gulf, is the 
peace mission to Iran and Iraq 
which is being undertaken by Mr 
Perez De Cuellar, the UN Secretary 
General. 

“1 am following the Secretary 
GeBeraFs imminent journey with 
baited breath and I pray to God that 


the UN wifi succeed in securing 
peace with justice,” was the final, 
heartf elt declaration to the 
by Mr Giulio Ax^dreotti, Italian 

Foreign Minister . 

He was pchnmg a s en time nt ex- 
pressed by all the governing parties 
that Italian naval wpwiitinn 
may be rendered unnecessary fay 
Mr Perez De Cuellar’s efforts. 
Many influential speakers went fur- 
ther, however, and urged the gov- 
ernment to withhold sailing orders 
imfai t he T wafa ri frii« mission were 
known. 

For the Tn^mmit, file government 
gives the impression of wanting to 
act like a major European power in 
protecting its interests 


Refugees occupy Athens offices 


ABOUT 20 Kurdish and Turkish 
refugees yesterday staged peace fu l 
takeovers ef the Athens offices of 
the Associated Press international 
news agency, £BC Television of the 
US aim the Turkish newspaper 
Gunaytbn, Renter reports from 
Athens. 

•The demonstrations, friiich lasted 


about two hours, were carried out 
by members of the Comm unis t Par- 
ty pf Turkey (TKL) and the Turkish 
Marxist Leninist Party (ML) 
against what they termed maltreat- 
ment of political prisoners in Tur- 
key. 

A declaration han ded to journal- 
ists by the refugees also denounced 


the dpath of a Turkish leftist, Mr 
Bidar Sensoy.aflegeji to have been 
beaten ty police during a, pretest 
march in Aqkara pa gtyteraber L 

The demonstrators, who fine in & 
refugee «wnp on the outskirts c£ 
Athens, feft the offices wfthooiinc^ 
deni and $er? were so arrests. 


Protesters held 
after Iranian 
embassy siege 

By Karon FbnR In Oslo 

A GROUP who held 10 people, in- 
cluding two diiMwn, hostage In tbe 
Iranian embassy in Osk> were ar- 
rested yesterday after surrendering 
to police. 

The embassy’s charge de affaires, 
who was struck on fee bead, was 
the only person injured during the 

iaridgnt- Osin pnilffpww niwhte tn 

identify the origin of a zumber of 
shots heard during the seige. 

The action, which lasted three 
hofes, was part of a 10 European 
rity protest winch began yesterday 
morning agamct the AyatoUah Koh- 
meinfs regime. 

The 11 protester s me believed to 
be linked to the MaroshLen joist 
organisation OGFPI which is based 
in Paris. 

A Justice Ministr y official said 
the seige was designed to protest at 
the export pf weapons to Iran arid 
to highlight the of priso n? 

ers hriri in Iranian jails. 

T he offirial said the protester^ 
were believed to be connected to 
tho occupation of London’s Iranian 
Consulate two years ago. 

Iran’s ambassador to Scantfinav? 
2 a was not in the embassy during 
fee incident. 


East German press 
quiet on new niles 
for Western imports 


BY LESLIE COUTT IN WEST BERLIN 

the Socialist state and its citizens." 
Customs duties on electronics wifi 
be towered to between 40 per cent 
and 60 per cent of fee retail price in 
West Germany. 

Travellers are to be permitted to 
teifo video jpecopdersand tapes into 
East Germany but must take them 


THR OFFICIAL East German press 
faiiivi to publish a list of new regu- 
lations agreed on with West Ger- 
many Myijw this week to widen the 
fist of items which may be brought 
nr rnaiiprf to East Germany. 

Despite blanket East German 

media coverage of fee visit to West — , 

Germany by fee East German lead- back rat again, 
er, Mr Erich Honecker, only oblique Another result of Mr -Hqnocfcer’s 

montirm was made of fee smut visit to West Germany is the re- 
tan ecus announcement in Bonn jjan^y ptinn of negotiations bftween 
that restrictions would be eased. _ East Ge rman and West Berlin offi- 
fhe new regulations allow previ- dais over exchanges of property on 
ousiy banned speciality publics- either side of the Berlin wall. 
tims to be sent or .brou ght into East HMJS $ prominent piece of 

Germany along with Western eaten- belonging to East BerHn,jirts 

dais, yearbooks and stamp cate- ^est Berlin near PQtsdafoer 
logues. However newspapers and pj^- ^ ^ heart of prewar Berlin 
general interest magazines wifi stall ^ ^ accessible only to EastGer- 
not be permitted. ^ man border guards. West Berlin 

We^ offimals m East Berta ^ fee land and 

said fee East German authorities .. ^ Drooer ty on the east- 

probably withheld fee formation 

to forestall an avalanche of re- ' 

quests for Western publications by • 08 ahmg . . , 

East Germans wife relatives and In return it is prepaned tn cede 
f riends in fee West three uninhabited West Bairn en- 

Tape recordings are also to be al- claves inside East Bertina nd to pay 
lowed into East Germany provided East Germany the difference in 
they do not violate the interests of land values. 

Austria widens probe 
Into Iran arms sales 


BY JUDY DEMPSEY IN VIBtNA 

THE AUSTRIAN authorities 
have begun Investigations into 
fee trading activities of several 
people after Mr Peter Unter- 
•weger, fee former head of fee 
aims manufacturers, Norlcum, 
a subsidiary of Austria’s largest 
state-run steel and engineering 
grotto, was detained last week- 
end on suspicion of illegally 
setting arms to Iran. 

Mr Unterweger is under 
investigation for selling 200 
pimwin anfl munitions ’ worth 
2300m to Ban in 1985. A 
spokesman for Voest-Alpine 
earlier this week dented that 
the company had •over know- 
ingly sold arms to Iran.** 

During the three-day starch 
of Noricnm’p premises, which 
is based in Linz, the authori- 
ties found documents and 
papers. A court in Linz trill 
meet next week to decide 
whether formally to charge and 
arrest Mr UnterwegBT, who 


was replaced as chairman of 
Norlcum last April In a shake- 
up but irii o still retains a con- 
sulting role. 

The new investigations 
involve the former manage- 
ment of Noricuxa as well as 
the former chairman of Voest- 
Alplne, Mr Heribert Apfolter, 
who died last month. So for, 
none of them has been, 
detained. The authorities in 
Linz are still going through* 
the papers seized last weekend. 

It has since been diseased 
in fee Austrian press that as 
late as 1986, Norlcum was sell- 
ing military e q u ip m en t to 
Libya contrary fo statements 
by a spokesman for Voest- 
Alpine on Monday feat afi anps 
sales to Libya had ** stopped by 
1985. ** Austrian newspapers 
are openly asking whether or 
not fee arms sold to Libya 
during 1965 and 1986 were 
shipped to Iran. 


/C‘ 


The nation’s most 
central location. 
No wonder Britain’s 

moving our way. 


No ot h er development area 
comes cfase to Wn fogto n -Roncom 
for sheer centrality within the UX. 

North, South, East or \Afest; the 
markets you need are easSy aecessfote. 

* Glasgow and Southampton, 

for ottnpfe, are virtually equ*tatanc 
at around 220 mtfe& 

Bristol and Newcastle bofe 
dock In at 160 mSes. 

And you canjet down 
to London in just 40 
minutes from Manchester 
Inter na tional Airport. 

bi fact, Wjrrlngton- 
Runcornfc superb corn- 

’ municadons put 15 m|Bon 


peojfe vdthto an hourk drive. 

Whart more, we offer capital 
grants of the mvdmum 15% or £3£00 
for eadt |ob created, for qudfyfr^ 
companies. 

ThenAadcJed w orkforce on 
your doorstep, and a wide chotas of 
folly-serviced sites or 
ready-buflt unto from 500 
to6GyOOOscffc 

Phone Bfeen BHton 
now or write to her at The 
Development Corporation, 
P.Q, Box 49, Vt&rrington 
WA12LF. 

She’S get more tnfcr* 
madon moving your wajt 


uiARiuncron-RuncoRn 

Telephone Eileen Bilton Now. 


0925 33334 



•••.,» *. V ••••!-. 
~ . - A. \ . . - -»* 








MA NDARIN ORIENTAL 
THE HOTEL GROUP 


The legend of Mandarin Oriental 
was created by two of * 
the finest bond? in the -world. 
The Oriental Bangkok and 
Mandarin Oriental Hong Kbng. 
This legend grew from a 
reputation for excellence in service 
and a dedication to providing the 
most elegant accommodation. 

Non; die essence of 


that legend has been captured 
by Mandarin Oriental Hotels 
in a few other select locations 
inducting Singapore and 
SanFranasca Soft's hardly 
surprising that other 
hotels have tried to capitalise on 
our gopd name. Jfeedlcss to sag 
though, they haven’t been able 
to imitate die fogend. 


MANDARIN oriental 
THE WORLD'S FINEST HOTELS 









i] 



Financial Times Friday September 11 1987 






EUROPEAN NEWS 


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slim chance of 
staying ini power 


BY HILARY BARNES W COPENHAGEN 


r J^^ByE?ifiETIlHSraS- -Prime 
^MinMer^ Poul - Schloetec -pre- 1 

- stented his , new. f our:party nou- 

socialist government to Queen 
. Margretbe yesterday and . said 
‘that desipte " extremely ■ diffi- 
ieult parliamentary circum- 
' stances " he was aiirrin gto serve 
*■ a full f on^year term. 

«..• But .the. survi val chances of 
his coalition, backed by. only 70 

- of the 170 seats in the Folket- • 
;ing, of Parliament, appeared to 

' shorten - yesterday. ' 

• “This government wont last, 
"many months,'*' predicted Mr 

* Svend Auken, who is expected 
£to take. over .the leadership of 
*the opposition Social Demo- 

- era tic Party from Mr Anker 
. Joergensen, who announced bis 

resignation late yesterday. _ . . 
Mr Joergensen, 65, a former 
*■ trade union leader^ has led- the 

- Social Democratic' Party since 
1872 and ’ served as Prime 
Minister for nine of the 11 years 
between 1972 and 1982. The 
party lost two seats in Tuesday’s 
election, which has triggered 
his decision to resign. 

The new: - threat', to the 
Government’s life comes from 
the Radical Liberal Party, which 
with 11 seats can make or break 
the Government' in- -the frag- 
mented nine-party Folketing 
which resulted from Tuesday's ' 
election-. 

: The party said.it Is no longer 
committed: to support of. the 
Government We shall can- ; 
sider each proposal from the 
Government as it is put - 
w forward,* said Mr Niels Helweg 
•-• Petersen, the party's leader. 

Mr Petersen^, whose role as 
-king-maker -makes -him one - of 
-the-- most - powerful men in 
Danish politics, -comes from an 
old political family. His father 
. was leader of the Radical Party 
.before him and his wife was. 
'elected ter the Folketing oh 
.Tuesday. 

Rie party has held. the. 
balance between left and' right 
‘ in the Folketipg for most of this 

*5. - • ' : : . ■ v ■ ■ • ■ ' • 



Schlueter: aims for four-year 
term 

century, and although it rarely 
wins more than 5 or 6 per cent 
of the vote it has a quite dis- 
proportionate influence on the 
political process. 

Mr Petersen said that his aim 
will be to bring the opposition 
Social Democratic Party into 
constructive negotiations on 
government proposals in order 
to mitigate the influence of the 
left and right extremist -parties. 
'The- Radicals are especially con- 
cerned to isolate, the tax-protest 
Progress Party, whose nine 
seats- give the non-solialist 
parties a theoretical majority of 
two. 

Bat the Social Democrats do 
not seem inclined to respond. 
“There is hot much perspective 
in.- co-operating with this 
Government." said Mr Auken, 
who described the coalition as 
“ the worst: imaginable govern- 
ment.” 

Mr Schlueter has retained Mr 
Uffe EUeraann-J ense n. Liberal, 
as Foreign Minister for another 
term and his Conservative Party 
colleague Mr Palle Simonsen 
returns to the Ministry of 
Finance. But he brought in six 
new faces and set up a new 
Ministry of Health. 


ST 

Ti 

8 


ELECTION RESULTS 


Votes 


1984 


1987 


Conservatives 

jJUborat* „r - 

iGcnbv Oenwemt *— t =* 
1 Christen People’s Party 

|c<n!itkm total 

| Radicals 
] Progress Party 

Right total 


Soda! Democrats 
^Socialist People’s Patty 
| Left Socialists 
L Common Cause 

'Loft total 


Stave 

Seats 

Share 

Seats 

2X4 

42 

208 

38 

.12.1 

. 22 ... . 

1&5 

19 

- 4*-^ -• ■ 

* . . 

- 

9- 

27 

5 

24 

4 

. •€« 

- „ ■ 

38* 

70 

- 5L5 

18 

12 

11 

A* 

& 

41 

9 

JW 

93 

49S 

90 

3L6 

54 

29 J 

54 

1LS 

21 

144 

27 

24 

5 

1.4 

0 

: o 

O 

22 

4 

:as7 

82 

: "474 

85 


r Greenland 
>j Faroes 
-Odws 
j Total . 


O 

. 2 

0 

O 

2 

0 

24 

0 

• 3.0 

. 1000 

170 

IOOjO 


2 

2 

0 

179 


Danish plan aims 
to 




BY HILARY BARNES IN COPENHAGEN 



A SET of measures to improve 
the - competitivene ss ' of the 
Danish export industry will be . 

• among the first to-be presented 
to Parliament by Prime Minister 
■Poul Schlueter's coalition 
: Government . . when it re- 
r assemb les on October 6 follow. 
ring Tuesday’s election. 

The measures will include 
[swifter reimbursement of VAT 
ffor export companies, better 
-depreciation rules for research 
: and development and a slightly 
milder tax -regime tor export 
salesmen. 

The proposals, are welcome to 
[.embattled export businesses,' but 
?they will make more than a 
'small impact on the overriding 
problem of the Danish economy, 
its slow slide into, the mire of 
<f international . indebtedness - 

‘through 25 consecutive years 
?with current account deficits. • 

; The net foreign debt will 
Epass 40 per cent of the gross 
.-domestic product this year and 
[approach 130 per cent of current 
.account revenues. Interest on . 
ithe foreign 'debt is now costing 
^almost 4 per cent of gross : 
domestic product at around 

• DKr 25bn (£22btt) a year. 

$ Against this background, the 
i prospect of a period of parlia- 
mentary instability is worrying 
the business community. As 
jone of the country's foremost 
C economists, . Professor Anders 
-Oelgaard, commented: "The 
■economic problems will be very 
•{difficult to solve if the -unstable 
apolitical situation lasts lor very 

• long.” 

But Mr Schlueter mid Mr 
.Palle Simonsen, the Finance 

• Minister, can take, comfort 
‘from the fact that the current 

account deficit, whl ch soared to' 
;5L2 per cent of. the GDP, at 
'-DKr 34Jbn, last year, is, 
respected to fall by half this 
year, and. there may be some 
[further improvement in 1988. - 

• This development has a les*' 
•happy, aspect to it A fall ci£ 
about 1 per cent in the GDFIs 
expected^ IASI, and-according 


to the OECD’s August survey 
of Denmark, it will not recover 
Ip 1988. . 

The recession follows tough 
measures introduced last 
year,- which brought . an abrupt 
halt to a three-year boom in 
private consumption and invest., 
meat. ' Imports in the first five, 
months of this year fell by IS- 
per cent, but exports also fell, 
by '5 per cent The trade 
balance improved dramatically, 
however, from a deficit in the 
same period last year of DKr 
7.1bn to a surplus of DKr 990m. 

Unemployment, runn in g at a 
rea sonally adjusted rate of 8 
per -cent, has not shown any 
nigng of rising so far, bat all 
forecasters expect that It will 
rise to around 10 per cent next 
year. 

The rise In hourly wage costs 
this year is one of the most 
worrying current trends. The 
working week was cut by an 
hour at the end of last year 
and will be cut by a further two 
hours to 37 hours by 1990, with 
full wage compensation. . 

Employer social security 
costs were put, up by li per 
cent this' year as well. Wage 
rates in. the second. Quarter 
were up hy about 7-8 P** cent 
compared with last year. 

Mr Schlueter — with the 
emphatic support of the Social 
Democratic opposition party, 
has made an unchanged 
SMcn waiiy adjusted rate of 8 
eschango rate against the Ecu 
(Denmark is a member/of the 
European Monetary System) a 
bulwark of his anti-inflation 
policy, and he received support 
for tins approach from the 
OECD report on Denmark in 
August, which said that a policy 
of exchange rate stability was 
essential- 

The foreign exchange mar- 
kets seem to have taken this 
to heart' Although the krone 
weakened slightly on Wednes- 
day, toe currency was- not in 
trouble in quiet trading Yester- 
day.- ~ 


Italy seeks 
to delay 
EC steel 
decision 

By John Wjrlw In Rome 
THE ITALIAN Government 
Is seeking a postponement of 
the meeting of European 
Community industry minis- 
ters set for September 21 
which IS to discuss proposals 
to reduce the EC's steel 
capacity by 30m tonnes. 

A spokesman for the 
Ministry of State Participa- 
tion, which oversees the 
public steel sector, said yes- 
terday that member states 
were so divided over the 
European Conunlsison’s pro- 
posals that M It would he 
better to give officials more 
time to work on them." 

However, the Italian initia- 
tive also has a strong domes- 
tic component and follows a 
pressure on the government 
fror> Mr Romano Prodi, the 
president of Iri. He is ulti- 
mately responsible for ttie 
loss-making state steel com- 
pany, Finsider, and wants to 
buy time for the president 
and chief executive he in- 
stalled in July to produce a 
revised corporate plan aimed 
at potting the r group back In 
the black by 1989. 

The plan should be ready 
by the end of the month 
when the Finsider manage- 
ment will begin discussions 
with ministers and trade 
unions. Before then, the 
Government will want to 
avoid entering Into any com- 
mitments at a European level 
on Flaslder’s future size and 
shape. 

Finsider lost L986-4bn 
(£4 55m) last year and Is 
badly in need of recapitalisa- 
tion and restructuring. The 
general expectation in Rome 
is that the Government would 
come under early pressure 
from Brussels to close the 
Neapolitan rolling mills at 
Bagnoli with the loss 
of 3,500 jobs. 

Workers there are already 
organising regular protests 
against closure. Meanwhile, 
an agreement has Just been 
signed between Fiat and the 
Ministry of State Participa- 
tion to produce a develop- 
ment plan for the area 

Opposition in 
Ankara angry at 
early election 

By David. Benjnrd hi Ankara 
TURKEY'S " THREE mate 
apportion parties yesterday 
held long meetings to discuss 
a possible boycott of the 
country's general elections on 
November 1. 

The opposition parties are 
objecting to a change in 
electoral law, passed by the 
Turkish Parliament on 
Wednesday, that means 
parties wffl have to get more 
th an 24 per cent of the vote 
.in . jwder to win places in 
parliament. They also daim 
that the campaign organising 
period, two months instead of 
the customary three, is too 
short, and that electoral 
registers are out of date. 

A farther objection to . the 
proposed date is that it comes 
.less than a. week before a five- 
year military ban expires on 
voting by 2.4m Turks. The 
bah was a punishment for not 
easting their rotes in the 1982 
referendum. 

A spokesman for the centre- 
right Tree Path Party said 
yesterday that the party 
would gti ahead with the boy- 
cott -if" the other main oppasi- 
tioq. parties, both left of 
centre, agreed. 

But most observers here 
fed that the opposition 
parties will have difficulty in 
agreeing a Joint strategy. Mr 
Gal's decision to hold a snap 
election has dearly caught 
■ the apposition off balance. 

Swiss inflation 
rate edges up 

.By Wiliam Dultfbrce in Geneva 
INFLATION in Switzerland, re- 
puted. in recent years for the 
stability of its consumer prices, 
has started to edge up faster. 
In August the consumer price 
index rose by 0.4 per cent, indi- 
cating an annual rate of 2 per 
cent compared with IB per cent 
in July and 0.7 per cent a year 
ago. ■ 

Last month for the first time 
since September. 1985, prices 
of imported goods rose slightly 
faster than those of domesti- 
cally produced goods, the Fede- 
ral Bureau of Statistics, repor- 
ted. This change was mark ed 
by higher prices for imported 
oil products, fruit and vege- 
tables.' 


Kenneth Gooding on the FT World Motor conference in Frankfurt Mercedes’ 

Motor industry downturn forecast Mitsubishi 


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THE WORLD motor industry is 
beading for a downturn which 
could be far worse than the 
deep recession of 1980-81. 
warned Mr Roger Vincent, 
Bankers Trust managing direc- 
tor, yesterday. 

But the industry is in far 
better shape now “while the 
next downturn might be severe 
I do not expect that the number 
and names- of vehicle manu- 
facturers will look much 
different from today. 

The coming recession could 
take on very serious proportions 
because of a combination of 
worldwide overcapacity for car 
production, a US led recession, 
inflationary pressures and rising 
protectionism, he said. 

The big risk relating to over- 
capacity. which could make the 
financial consequences of the 
next downturn worse than 1980- 
1981, would be a massive battle 
for market share throughout 
the middle range of the US car 
market. 

“ Such a battle would -inevit- 
ably . puli down the pricing 
structure across the entire 
product range of automobiles 
sold in the US with a spillover 
impact on virtually every auto- 
maker and component supplier. 

Mr Vincent pointed out the 
global position of the industry 
was not well balanced but had 
become too dependent on one 
market — the US for its profits. 

An analysis of the industry's 
operating cash flow (net in- 
come pins depreciation and 
amortisation, less, capital ex- 
penditure and dividends), which 
indicates a company’s ability to 
pay for Its forward needs on a 
current basts, showed the three 
major US groups already have 
dipped to negative operating 
cash flow;, the Japanese have 
experienced a dramatic drop 
and only the European special- 
ist car producers had been 
able to sustain a high level. 

The European volume car 
producers had shown enormous 
improvement but their cash flow 
had not become positive in the 
peak of the cycle and they will 


FT 

(CONFERENCE) 

World 

Motor 


enter the next downturn with- 
out the benefits of the financial 
reserves built up by other 
groups. 

Hr Scott Mertis, Morgan 
Stanley vice president, main- 
tained automotive company 
stocks were the cheapest in the 
world relative to their past earn- 
ings and cash flow. 

The reason was that investors 
remembered cataclysmic earn- 
ings collapses by mass pro- 
' ducers in the 1970s, when 
some companies nearly went 
bankrupt. He believed this 
would not happen again in the 
1980s. 

Volkswagen shares' were the 
cheapest in the industry sug- 
gested Mr Merlis with General 
Motors in second place. 

He suggested that if GM 
accomplished only half its 
$1,800 car cost reductions target 
over the next five years it would 
mean a 60 per cent improve- 
ment in the company's average 
earning power from $3bn to 
nearly $5bn. 

Mr Merlis also recommended 
Honda, Jaguar and BMW as 
shares to buy. 

Mr Giorgio Garnzzo, Iveco 
managing director, said further 
restructuring of the European 
truck industry must be expected 
because there were still too 
many manufacturers with too 
much excess capacity. He 
pointed out that the ability of 
the European truck manufac- 


turers to tailor vehicles to 
specific requirements created a 
barrier difficult for non-Euro- 
pean producers to get over — if 
not helped to do so by Euro- 
peans themselves. 

44 To my mind, advanced 
specialisation of this kind has 
provided European industry in 
general with a stimulus to 
innovate and to develop more 
and more sophisticated tech- 
niques giving it undisputed 
leadership over the rest of the 
world. 

“For this reason I am not 
an advocate at all costs of 
unifying the regulations gov- 
erning the weight and dimen- 
sions of trucks within Europe." 

Mr F. Perrtn-Pel letter, coun- 
cillor to the president of 
Peugeot, warned that cars 
would continue to get more 
expensive and customers must 
expect price increases averag- 
ing 2 per cent to 3 per cent a 
year. 

This was because customers 
were demanding cleaner, safer, 
more powerful, better equipped 
and more distinctive cars. 

He said that the harmonisa- 
tion of the economic policies of 
the various EC countries as 
desired by the Commission, 
risked accentuating the signtfic- 
cant fluctuations in car demand 
faced by manufacturers which 
at the moment could rely on 
falls in one market being com- 
pensated for by increases in 
another. 

The European car industry 
might therefore see by 1992 
swings of 30 per cent io 
demand from one year to 
another as has happened in 
North America. 

Prof Noritake Kobayashf of 
the Graduate School of 
Business Administration, Keio 
University in Japan, suggested 
the motor induriry needs to 
have some sort of global sur- 
veillance system which would 
monitor the changing trends of. 
supply and demand worldwide, 
provide a forum in which 
industry and Governments 
would be represented and 


which would develop practical 
and constructive solutions to 
the problems to come. 

He and other speakers sug- 
gested that international 
alliances presented an effective 
solution, to those problems. 

“ Whatever major problems 
the automotive industry may 
confront the formation of effec- 
tive strategic alliances across 
national borders Is tbe key to 
the continued orderly develop- 
ment of this very important 
industry which purports to 
serve the human need for free 
and efficient mobility," he said. 

Mr John Hardiman, Ford of 
Europe vice president for parts 
and service operations, sug- 
gested that after sales and ser- 
vice has become one of the most 

important factors of all in 
determining competitive vehicle 
market shares and tbe overall 
success of individual manu- 
facturers. 

Vehicles could no longer be 
sold in isolation but were part 
of a total transportation package 
of “ comfort convenience, 
value and reliability throughout 
the ownership cycle.” 

Dr Hans Jorg Mauger. 
member of the Executive Board 
of Robert Bosch, suggested that 
for the supplier industry, the 
big growth potential lies in 
the delivery of new and 
sophisticated systems and com- 
ponents to the automotive 
companies. Such products have 
been made feasible by the 
recent rapid technological 
advance. particularly in 
electronics. 

Mr Herman Franz. Siemens 
executive vice president, said 
the increasing use of electronic 
systems in cars would involve 
drivers being excluded more 
and more from the physical 
control of the vehicle. In 
future they would indicate 
their wishes and electronic 
systems would then take over to 
“ drive the car.” Mr Franz pre- 
dicted cost reductions would 
make the necessary electronic 
hardware completely affordable. 


truck link 
attacked 

By Kenneth Gooding, Motor 
industry Correspondent, 

an OUTSPOKEN attack on the 
decision by Daimler Benz, West 
Germany's largest automotive 
group, to link with Mitsubishi 
of Japan in a joint van venture 
MMft yesterday from Mr Giorgio 
Garnzzo, managing director of 
Iveco. the Fiat-owned group 
which is Europe’s second 
largest heavy truck producer. 

The venture would give 
Daimler the opportunity to 

import technology, components 
and possibly built-up vehicles 

to Europe from Japan, and 
other European commercial 
vehicles producers might be 
forced to follow suit, he said. 

There was already substantial 
over-capacity in Europe, some- 
thing Daimler bad previously 
pointed out, on many occasions. 
"Competition in Europe already 
is very severe and there is no 
need for added competition.” 

Mr Garuzzo suggested there 
were many potential West 
European partners which Daim- 
ler could have considered, “or 
if it bad wanted to disinvest 
there would have been no 
shortage of European buyers.” 

He pointed out that Iveco, 
which has plants in Italy, 
France, West Germany and the 
UK, had pulled itself out of 
severe financial difficulties 
caused hy the deep recession 
in truck demand through pain- 
ful re-structuring which had 
been expensive and often 
attracted criticism. But the 
group had resisted the tempta- 
tion to look outside Europe 
for assistance. 

There was a danger. Mr 
Garuzzo claimed, that thr Pro- 
posed Daimler-Mitsubishi deal 
would divert the European 
Commission's attention away 
from what he claimed were 
unfair competitive practices of 
Japan, not only those affecting 
the motor Industry. 



British Airways 
aim high with new 
Boeing 767s. 


British Airways make no secret that 
its corporate goal is to be the best in 
the business.. 

And thecompanyS Tecent decision 
to order 11 new Boeing 7675s clearly 
supports that high ambition. 

The new jetliner^, powered by Bolls- 
Royce engines, meet the airlines key 


requirements for top performa n ce,- 
economy, high reliability arid 
superior passenger appeal After a 
thorough review of all the possible 
choices, British Airways selected 
the best. 

Boeing congratulates British Airways 
on its search for excellence, on its 


decision to grow with the 7 67 , and 
on its continuing dedication to the 
best service for the travelling public. 










Financial Times Friday September 11 1887 


American 
Airlines 
to the USA 
from 8 
European 
cities. 


From London/ 
Gatwick, 
Manchester, 
Paris/Orly, 
Frankfurt, 
Dusseidorf, 

Munich, 
Geneva and 
Zurich. 



Cafl your travel agent or nearest 
American Airlines office. 


OVERSEAS NEWS 

Scheherazade Daneshkhu and Charles IVIUler describe Iran s factions 

UN confronts a divided Tehran 


THE VISIT to Tehran which 
Mr Javier Perez de Cuellar, the 
United Nations Secretary* 
General, begins today has 
brought into focus again the 
divisions within Iran's ruling 

hierarchy. 

Iran’s delay in responding to 
US Security Council resolution 
598, which calls for an end to 
the Guf war. has been in part 
tactical, but it is also the mani- 
festation of an inconclusive bout 
of infighting between hard line 
and pragmatist factions on this 
most sensitive of issues. 

Hie UN Secretary-General is, 
of course, going to Tehran ana 
Baghdad with a specific aim: 
to secure full implementation of 
the ceasefire resolution, not to 
renegotiate it. 

Bnt the fact that he is going 
at all is an indication that the 
pragmatists are by no means a 
spent force. If they come out on 
top in the next few days, they 
are likely to try and keep, a 
dialogue with the. UN going, in* 
stating that Iraq be named as 
the original aggressor in the war 
but perhaps back-pedalling on 
Iran’s five-year-old demand for 
the removal of Iraqi President 
Saddam Hussein before agreeing 
to a ceasefire. 

The hard line faction, how- 
ever. sharply disagrees and 
would like to see this resolution 
rejected out of hand, as all pre- 
vious Security Council moves 
have been. 

Similar disputes revolve 
around the issue of a final 
settlemo/.. Publicly, all Iranian 
leaders support the war effort 
and scoff at the idea of holding 
peace talks. Nobody can con* 
template negotiating with Sad* 
dam Hussein, but there is some 
evidence to suggest that the 
pragmatists may be prepared to 
talk to a Baathist party Govern- 
ment as long as Mr Hussein 
and his closest associates are 
removed. 

The key figure remains Aya- 
tollah Ruholiah Khomeini, 


who tries to stay above factional 
disputes but has tended on 
foreign policy issues and on the 
war to side with hardliners. 
Even if the pragmatists do 
succeed in keeping lines open 
to the UN, it would be difflcnlf 
indeed to imagine him agreeing 
to consider a ceasefire. 

Although the factions are not 
necessarily consistent on all 
issues (for example; the prag- 
matist best known to the West, 



Ali Akbar Vebyati 

Hojatoleslam Hashemi Kaftan* 
jani, the influential speaker of 
parliament is a quasi-radical 
on economic affairs), a dtacern- 
able group has nevertheless 
emerged which is less hard line 
in the main policy areas. 
Iranians themselves pose the 
distinction in terms of radicals 
and u the others.” From 1985 
teSil recently, it was these 
others that were gaining the 
upper hand, though in recent 
months they have suffered 
serious set-backs. 

Political differences often 
reflect contrasting backgrounds. 
The secular pragmatists tend to 
be 'Western-educated, as In the 
case of Mr Ali Akbar VeZayati, 
the Foreign Minister, while 
many of the secular hardliners 
are from the lower middle class 
and some have been involved in 


armed movements in snch 
places as Lebanon. There are 
girpna r divisions within the 
clerical hierarchy. 

The importance or the prag- 
matist faction lies in the links 
it has established with large 
sections of the population, in- 
cluding -those who axe not 
necessarily in full sympathy 
with the Islamic republic; 

CTiwniit the pragmatists hold 
unchallenged power, they would 
seek to normalise relations with 
the West and to find a face- 
saving end to the war. Recent 
visits to European capitals by 
high-ranking as 

Mr Velayan and bis deputy, Mr 
Mohammad Jawad Larijani, 
were an indication of the prag- 
matists’ continuing efforts to 
improve relations with Europe. 

Domestically, the pragmatists 
would be prepared to accommo- 
date some of the wishes of the 
“ bazaaris ” (merchants) and 
the middle class, by encourag- 
ing trade and relaxing state 
interference over matters such 
as dress and even drink and 

ga-mh lnrg - 

By contrast, the hard-line 
factions, whose leading figures 
include the Prime Minister, Mr 
Mir Hussein Mousavi, and to 
some extent Pres i dent Ali 
Khamenei, stiff adhere to the 
Ideological principles on which 
the republic was founded. 
These include the idea of main- 
taining permanent revolution, 
and exporting it. 

They finance Islamic resist- 
ance and terrorist movements 
in Lebanon, Atgbntatan and 
Europe, t hr o ug h the World 
Organisation of Tshnwa* Libera- 
tion Movement* formerly 
headed by the now-disgraced 
Mr . Mehdl Haahftml, 

There Is no doubt that the 
hardliners have recently been 
growing in influence. The 
evidence includes; 

• The recent -diplomatic crises 
with France ana Britain. The 


arrest and beating-up of a 
senior British diplomat, Mr 
Edward Chaplin, in May was 
most probably undertaken with- 
out the knowledge of the 
Foreign Ministry. The same 
probably goes for the current 
confrontation with France, in- 
volving an interpreter at Iran’s 
Paris embassy. 

These events suggest the in- 
creasing influence of Hojatoles- 
Mohammad Reyshahri* the 
head of the internal security 
organisation and a leading 
opponent of the pragmatist 
approach to forri&i policy. 

• The abolition earlier this 
year of the Islamic Republican 
Forty, which bad been a useful 
vehicle for the expansion of 
pragmatist influence domestic- 
ally and the forced disbanding 
of an Independent organisation 
of moderate clerical leaders. A 
newspaper closely associated 
with the latter group. Resalat, 
was also shut down. 

One of the many ironies of 
recent US policies towards Iran 
is that they have heaped the 
hardliners to stage their come- 
back. In the first place, 
although President Ronald 
Reagan's original stated aim in 
selling arms to Iran was to 
strengthen the moderates 
within the Iranian Government; 
the policy probably bad the 
opposite effect since it is the 
hardliners that are most closely 
associated with Iran's arms pro- i 
curemeut activities. ! 

In these circumstances, it is 
hard to see how Mr Perez de 
Cuellar’s mission can succeed. 
If he emerges next week with- 
out! Iranian agreement to a 
ceasefire, the stage will be set 
for further international mov es 
against Tehran and a further 
hardening of the political line 
within the country. 

T/M mnhon *ro nturetart an Iran 
fa th* d+p*rtmmt of Jatomctkmnl 
rotation* M itho London School of 
Economics. 


Troops set 
to seize 
Sri Lankan 
rebel arms 

By Mervyn de Sites ftv Colombo 

THE INDIAN peace-keeping force 
is awaiting orders from Delhi to 
launch an operation in Sri Lanka’s 
northern province to seize the aims 
which the se pa ratist rebel grogs 
failed to surrender after the cease- 
fire on August L 

Lt Gen Cyril Ranatimge, head of 
the Joint Operations Command 
(JOC) and the senior Sri Lankan of- 
ficer in charge of the north are now 
in Delhi to rifemss the outbreak of 
violence in the predominantly Ta- 
mil areas and internecine fighting 
between rival Tamil groups. 

The l ibera tion Tigers of Tamil 
Eelam (LTTE) has lost Iff men since 
the weekend, on LITE spokesman 
He admitted that the "Tigers'* 
had killed 11 members oE the rival 
Hote grouping. 

The derision , to Bush out arms 
which tire groups have failed to sur- 
render voluntaril y foll ows a mortar 
ntt flcV by the LTTE <m a Hote 
j camp. 

Estimates of the .percentage of 
arms surrendered vary. The Sri 
Lankan authorities put the figure at 
less than 50 per cent while Indian 
officers say it is nearer 7 per cent, 
including nearly aD heavy weapons. 

The Tigers who have accused the 
Indian troops of "cofluding" with ri- 
val groups (a charge denied by the 
TnrHnn high commissio ner, Mr Dix- 
it) have begun an anti-Indian poster 
campai gn. 

The LTTE claims that "crimmaT 
and anti-social elements have been 
released from detention in Madras, 
sooth India, and brought back to 
the island's northern province to 
"tame” the Tigers 


Afghanistan and Pakistan fail Australian coal miners 

to agree Soviet pull-out date ^ n week “ lfflf ^ strike 


BY CHRIS SHERWELL IN SYDNEY 


BY WILLIAM DULLFORCE IN GENEVA 


AFGHANISTAN and Pakistan nar- 
rowed the gap between them, but 
failed in four days of talks here to 
agree on a timetable for the with- 
drawal of some 115,000 troops from 
Afghanistan. 

Mr Yaqob Kh a n , the Pakistani 
Foreign Minister, put the blame far 
the setback squarely on the Afgh- 
ans. The latest raized - the 11th 
since 1982 under UN auspices - had 
not produced the results Pakistan 
had toe right to expect after the Ka- 
bul regime had called for it, Mr Yar 
qub Khan said. 

Kabul's offer to resume talks had 
been accompanied by indications 
that something substantial would 
be proposed, the Pakistani minister 
said. 

Soviet officials said last month 
that specific dates for the Soviet 
withdrawal would be set in Geneva 
and US officials indicated that 
Washington could be moving to- 
wards accepting a one-year time- 
frame for the pull-out 


When previous talks stopped in 
March Kabul had proposed an 18- 
month period for completing the 
withdrawal while Pakistan was still 
insisting on seven months. This 
week the Pakistanis moved to right 
months and the Afghan* to 16 
months but only after the Afghans 
had insisted on the Pakistanis mak- 
ing toe first move. 

Kabul's call for new talks had 
been a propaganda ptoy to disarm 
criticism that might be voiced at toe 
session of the UN General Assem- 
bly which opens later this month. 
Mr Yaqub Khan implied. 

However he exempted toe Soviet 
Union from criticism. Pakistan be- 
lieved in toe sincerity of Mr Mi- 
khail Gorbachev in wanting an 
Afghan peace settlement, he said. 

Mr Diego Cordovez, the UN unr 
der-secretary who acts as link be- 
tween tiie two delegations (they do 
not sit together because Pakistan 
does not recognise toe Kabul re- 


gime) suggested feat the next step 
should rnmo from within Afghani- 
stan. 

Some mechanism needed to be 
pot in place for fee Soviet-backed 
government in Kabul and the Afgh- 
an mchajeddm leaders fi ghting the 
Soviet Army to negotiate the reun- 
ification of their country before a 
peace settlement could be readied, 
he said. 

A timeframe for toe Soviet poDr 
out could not he settled without a 
beginning to toe process of reunifi- 
cation, Mr Cordovez said after ex- 
pressing his disappointment 

A f g h an i sta n is one of toe items 
on the agenda for Mr George 
Shultz, the US secretary of state, 
and Mr Eduard Shevardnadze, the 
Soviet foreign minister, when they 
meet in Washington next week. 

US and Soviet officiate started 
two days of on Afghanistan 
ami the situation in the Gulf in 
Geneva yesterday. 


MORE THAN -284100 Australian 
coal workers yesterday began 
a week-long strike at scores of 
mines in Queensland, _ New 
South Wales and Tasmania, in a 
desperate last tad to limit mine 
closures and job losses. 

Falling world coal prices and 
tight markets have exposed toe. 
costs of inefficient work prac- 
tices and government charges 
at Austialaan mines, forcing a 
restructuring of the country's 
biggest export-earning industry. 

On Wednesday, the Miners’ 
Federation won toe Australian 
trade union movement’s sup- 
port for its idea of a national 
coal marketing authority. 

Yesterday, miners* leaders 
demanded a meeting with 
federal government ministers to 
explain their lack of support 


for the proposal. They said the 
government had previously 
agreed to consider the plan. 

Coal employers have mean- 
while repeated warnings that 
the stoppage threatens the 
export trade. Thera have been 
reports that at least two 
Japanese ships have decided 
not to dock and load export 
coal. 

The miners are not due to 
meet .again until next Thursday, 
to decide their next move. The 
strike is expected to cost the 
industry around A$140m, but is 
thought unlikely to halt the 
restructuring process. 

Several thousand jobs are 
epected to vanish. Closures are 
expected at less efficient under- 
ground mines in New South 
Wales. 


SA police arrest UK involved in 
173 in Natal riots US Gulf force* 


South Korean opposition rivals 
fail to heal rift on constitution 


RIVAL POLITICAL leaders yester- 
day failed to resolve differences 
blocking the adoption of a new con- 
stitution designed to bring greater 
democracy to South Korea, AP re- 
ports from Seoul. 

Meanwhile, Mr Kim DaeJu%, 
toe opposition leader, said he had 
nrt decided wtetorir to run fto pres- 
ident despite being cheered hy hun- 
dreds of tbourands of people on a 
southern tour. 

The constitutional talk* are due 
to resume today. The remaining 
disagreements concern when the 
new constitution should take effect 


and when to bold parliamentary 
elections. 

The main opposition party says 
the new constitution should take ef- 
fect -before -the pres i de nti al elec- 
tions, scheduled for sometime be- 
fore December 20. Otherwise, it 
says, toe election would have no le- 


The ruling Democratic Justice 


effert on February 25, the day after 
fiie inauguration of a hew govern- 
ment Otherwise, it says, toe cur- 
rent government would lose its con- 
stitutionri legitimacy. 


The ndtog parly insists that the 
parliamentary electrons be held be- 
fore the inauguration of a new gov- 
ernment but the opposition wants 
them two months after the transfer 
ofpower. 

A key feature cf the new constitu- 
tion, which still needs approval by 
the. National Assembly and a na- 
tional referendum, is direct presi- 
dential elections. 

Mr Roh Tae-Woo, the ruling par- 
ty’s head, has been designated its 
presidential candidate, but the op- 
position has yet to pick its candi- 
date. 


SOUTH AFRICAN police, using 
sweeping anti-riot emergency 
powers, have arrested 173 blacks 
during incidents in Natal pro- 
vince, police said yesterday, 
Reuter reports from Johannes- 
burg. 

Areport on black township 
violence said 129 men and 42 , 
women were detained on Wed- ! 
nesday while attending an i 
illegal gathering at KwaMashu 
township near Durban on the 
Indian Ocean coast. No further 
details were given, on the 
i second night of increased town- 
ship agitation in NafaL 

At nearby KwaNdengezi town- 
ship. two youths were arrested 
after a group of blacks stoned 
a security force patrol, the 
statement added. . 

Two women were slightly in- 
jured when bus windows were 
shattered by stone-throwers in 
separate Incidents at Clermont 
outside Durban. 


BRITAIN’S military involve- 
ment with the large US naval 
task force in the Gulf appears 
to be much closer than the 
Government has officially 
acknowledged, a study by Brad- 
fttrd University’s School of 
Peace Studies claimed y ester- 
day, Andrew Gowers reports. 

It cited reports from Wash- 
ington suggesting that the two 
Nimrod reconaisiance aircraft 
which Britain dispatched to 
Oman last month— ostensibly on 
a training mission — were ■ in 
fact part of a joint US/UK 
notary operation aimed at 
identifying and sinking email 
Iranian boats involved in plant- 
ing mines. 

Tbe report also quoted plans 
Jo date back to 1984, 
whereby Britain would help the 
n^ t0k eep ©Pen the Strait of 
Hormuz in the event of an 
Iranian naval blockade. 


. . every working day, 
ifyouworkin the 
business centres of 

Lisboa 

& 

Porto 


0 


Lisboa 

887844 


And ask 
Roberto AJves 
for details. 


FINANCIAL TIMES 





GUANGZHOU— 
Export Commodities 
Exhibition >B7 


Your Best Opportunity To Talk Directly With 
Business Representatives From China. 


The City of Guangzhou is the political, 
economic and cultural centre of 
Guangdong Province. China. It is also the 
most important port in the southern part of 
China. 

This is the first time ever for 
Guangzhou to hold an export commodities 
exhibition in Western Europe. There will 
be more than 1,000 varieties of products on 
display. They include electrical home 
appliances, textiles, garments, general mer- 
chandise, arts and crafts, chemical pro- 
ducts, pharmaceuticals and medicines, rub- 
ber articles, machineiy equipment, metals 


and minerals, foodstuffs, native produce 
and animal by-products, etc. 

Business representatives from different 
countries are cordially welcome to visit our 
Exhibition and inquire trade opportunities. 

Hate: September 14-23, 1987 , 

Venue: China United Trading Corp. 

GmbH (China Trade Centre in 
West Europe) 

Address: 3rd floor, Hamburger 

SerassfU, 2000 Hamburg 76 
West Germany . 

Tel: (040)22702038, 22702078 


S' 




°Ps 

ta 



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involve!: 

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VAUXHALL CARLTON. 





Financial Times Friday September U 1987 


AMERICAN NEWS 


White House to Brazffian 


Mary Helen Spooner looks at the mood of Chile after 14 years of military rule 


seek $270m in 
aid for Contras 


industrial Pinochet shows no sign of loosening grip 


output down 
for July 


By Ann Charters In Sag Paulo 


BY NANCY DUNNE IN WASHINGTON 


UR GEORGE SHULTZ, the US 
Secretary o£ State, yesterday 
pledged intensive diplomatic 
support for the Central 
American peace agreement but 
told Congress the administra- 
tion would, in any case, seek 
an additional $27 Om over 18 
months in aid for the Nica- 
raguan Contra rebels. 

In a wide-ranging review of 
the administration 's position on 
Nicaraguan peace efforts before 
the Senate foreign relations 
committee, Mr Shultz praised 
the substance of the Central 
American peace plan, calling it 
a good framework, which, how- 
ever, left " some vital things ” 
vague and failed to deal with 
some of the US’s security con- 
cerns. 

By implication he gave US 
policies much of the credit for 
the plan, saying Ur Daniel 
Ortega, the Nicaraguan Presi- 
dent had been pressured to 
sign by the “in creasing success" 
of the Contras and the bi- 


partisan peace plan offered by 
President Ronald Reagan and 
Ur Jim Wright, the House of 
Representatives Speaker. 

On the diplomatic front, Mr 
Shultz promised the US would 
work to strengthen the plan, 
and he announced that the 
President would appoint Mr 
Morris Busby, the Deputy 
Assistant Secretary of State, hi 
be roving ambassador to Central 
America to co-ordinate the 
efforts of chiefs-of-mission. in 
each country. 


President Reagan has also 
selected a nominee as ambas- 
sador to Nicaragua, a career 
foreign service officer, whose 
same has not yet been made 
public, he said. In addition, he 
is nominating Mr Deane Hinton, 
former ambassador to El 
Salvador and Pakistan, to be 
ambassador of Costa Rica. 

Mr Shultz said the President 
viewed the new aid request “ as 
a constructive force far peace ” 
because it would continue to 
put pressure on the Nicaraguan 
Government to abide by its 
commitments under the peace 
plan. 

Speaking to a Congress 
already cynical about Nicara- : 
guan aid in the wake of the 
Iran/ Contra affair, the secre- 
tary stressed the bi-partisan 
efforts of the past. He urged 
Congress “ to end the donbt and 
□□certainty about the capacity 
and commitment of the US that 
is created by the recurring 
cycle of off-again, on-agaln aid 
decisions punctuated by pro- 
tracted and divisive debate.” 

The new aid, he said, " is what 
the resistance needs — for train- 
ing, equipment and other sup- 
port” However, he seemed to 
imply, during the senators* 
questioning, that the adminis- 
tration would be willing to use 
the funds for economic and 
development assistance to Nica- 
ragua if promises by Mr Ortega 
to “democratise” were fulfilled. 


THE BRAZILIAN economy is 
officially two weeks Into its 
flexible pricing phase fellow- 
lowing a two-and-a-faalf -mouth 
price freeze pot In place in 
mid-June under the plan of 
Mr Lula Carlos Bresser 
Pereira, the Finance Minister. 

Prices on goods such as 
clothes, shoes, furniture and 
services, may be adjusted 
freely. This has been the case 
in practice, since the govern- 
ment has no effective means 
of controlling prices on small 
and mediam-sl 2 ed companies. 

The prices of gasoline and 
alcohol, used as a fuel, rose 
8 per cent last week for the 
rirth time tbi* year. 

However, there are now 
more Industries subject to 
government-approved price 
increases as the government 
attempts to keep some prices 
and salaries rising at roughly 
the same rate. 


Industrial production for 
July declined 5.9 per cent 
compared with the same 
month in 1986, according to 
the government institute res- 
ponsible for economic data, 
the EBGE. 


Tax-break plan for debt 


BY ALEXANDER NICOLL 


AN innovative plan for banks 
to transfer African and Latin 
American loans to charities 
which would put debt service 
payments to work in debtor 
countries was unveiled Tester 
day by the UN Children's Fund 
(Unicef). 

Mr Richard Jolly, Unicef 
deputy executive director, said 
in London that the fond was 
negotiating with several US 
banks and that one was con- 
sidering the scheme. Debt 
Relief for Child Survival. 


Banks would make over a 
portion of their Joans to Unicef, 
winch is registered as a charity 
in the US and other countries. 


making donations tax deduc- 
tible. 

Unicef would assume the 
claim on the developing country 
and would seek interest and 
principal repayments in local 
currency. This would reduce 
the debtor country’s foreign 
exchange burden as well as 
enable Unicef to spend the 
money on alleviating poverty 
in that country. 

The amounts of money con- 
cerned would be quite small in 
relation to the overall Third 
World debt burden, but would 
still be significant: one batik 
was said to be discussing a 
$5m conversion. 


This is the first negative 
result since March 1984 when 
the conn try was emerging 
from a two-year recession. 
IBGE analysts predicted that 
production would decline 
through t>: third quarter of 
the year, with the most 
growth potential showed in 
Industries that produce chiefly 
for exports. 

Hie motor Industry, which 
had a slow month in August 
in domestic sales, predicted a 
Slight upturn in demand now 
that government taxes and 
surcharges on the retail price 
•f cars have been reduced 
and new models are starting to 
roll off assembly line. 

Vehicle exports to August 
reached $L7bn, up 54.7 per 
cent compared with the same 
eight months a year ago in 
value terms, and up 87.7 per 
cent in volume at 227,000. 

The govern ment's foreign 
trade agency CAGEX reported 
that for the first six mouths 
of the year 250 companies 
were responsible for 6&4 per 
cent of the country’s experts 
of tlORn, up from their 
contribution of 66J5 per cent 
in the first half of 1986. 


AT THE SIDE of a mountain 
road linking Santiago with the 
country town of San Jose de 
Maipo, Chilean officials t h i s 
week held a memorial service 
for the five presidential body- 
guards who died one year ago 
when leftist guerrillas opened 
fixe on General Auguste 
Pinochet’s motorcade. 

Speaking at the site of the 
attack, the Chilean military 
strongman, who today cele- 
brates his regime’s 14th anni- 
versary, called on his country- 
men to choose between “ order 
and chaos, democracy or 
disorder” 

Even as the end of his cur- 
rent term in office looms just 
18 months away, Gen Pinochet 
shows little inclination to 
loosen his grip on the country. 
In a recent interview with 
Chile’s pro-government news- 
paper El Mercuzio, the 71-year- 
old head of state cagily declined 
to say whether he would seek 
the junta’s nomination for the 
one - candidate presidential 
plebiscite to be held late next 
year, but said he felt more 
energetic now than he did in 
1973, the year his regime came 
to power. 

The regime’s constitution 
provides for a presidential 
plebiscite to be held a few 
months before Gen Pinochet’s 
presidential term ends, with a 
single candidate chosen by the 
militar y junta. If this candi- 
date wins he will serve an 


eight-year term ending in 1977 
and if he loses Gen Pinochet 
will remain in office for another 
year until open, presidential 
elections could be held. 

The latter scenario provides, 
in the words of a diplomat in 
Santiago, “the only system in 
the world where the winners go 
home and the loser stays." 

A recent opinion survey by 
the Latin American Social 
Sciences Faculty (FLACSO) 
indicates that from 12fi to 17 
per cent of those polled would 
vote “yes” in the presidential 
plebiscite if Gen Pinochet were 
the candidate, with more than 
40 per cent voting “no” and the 
remainder either abstaining or 
failing to respond. 

When asked how they mi g ht 
vote if a pro-Govemment 
civilian were the candidate, the 
response were similar and if 
soother military officer were 
the candidate, an even smaller 
group would vote “yes.” In 
recent years opinion polls have 
been the only way of scientific- 
ally measuring the political 

climate in Chile. 

The survey also asked 
Chileans what actions they 
would be wining to take in 
order for “the country to be 
as you want it.” Among 
Santiago respondents, more 
them a fifth were willing to 
risk their jobs and 14 per cent 
indicated they were willing to 
spend time in jail. 

Another question asked if in 









Gen Pinochet: feeling more 
energetic Qian when he took 
power 


Chile it was possible to express 
one’s political opinions freely, 
or was it better to be cautious. 


Nearly four-fifths answered that 
it was “ better to be cautious.” 


The Pinochet regime does not 
appear to be discouraged - by 
such polls. The Government’s 
own occasional opinion surveys 
do not suggest any si&tifica&tly 
greater support. The Govern- 
ment seems to be relying on 
the general sense of apathy 
concern with pocket book 
issues. With the economy grow- 
ing at more than 5.5 per cent 
and unemployment failing , the 
Government has an important 
margin of manoeuvre. 


A directive from Chile's 
Interior Ministry, recently 
leaked to the press, urged the 
country's mayors to undertake 
a poitical campaign in favour 
of the Government and said 
that municipal government 
funds shoult not be expended 
*• in a merely administrative 
fashion:” 

‘ The document also said 
Chilean opposition groups were 
undertaking a “massive propa- 
ganda campaign " aimed at 
r?gmap^^g^ tiie Government and 
that the officers of such groups 
should be “located, placed 
under permanent surveillance, 
analysed and neutralised in an 
adequate maimer.” 

The “massive propaganda 
ramp ai g n " by opposition groups 
which tiie Chilean Interior 
Ministry described is a buding 
movement for free elections, 
backed by most of the country’s 
political parties expect for the 
extreme left and right. Last 
week opposition groups held 
mock balloting exercises in 
three southern cities and 
received authorisation to do so 
from the local military 
governor. 


over 18 had signed up as 
August 51 and if the enrrer 
registration rate continue 
only 3.5m of . the nearly 8 
eligible voters will be inscribt 
one year from now when ti 
plebiscite is likely to be hel 
Given the higher degre of reg 
tration among government su 
porters, the regime is counto 
on some numerical advantage. 

Ironically, an un expect* 
source of support for ti 
regime's hard-line polici 
might be generaed by a race 
upsrge in terrorist activity. Tl 
Manuel Rodrigues Patriot 


Front, the guerrilla groi 
which claimed responsibili 
for last year's president! 
assassination attempt, » 
emerged after months of re. : 
tive inactivity. _ 

On September 1, the Fro 
kidnapped a senior Chile: ' 
army officer outside -his hou 
The guerrillas managed 
elude a combined army ai 
police dragnet in ~Skntia{ 
issuing two communiqu 
accompanied by colour phw 
graphs of the army color 
A leader of the Christt- 
Democrats, Chile's largest op? 
sition political party, describ 
the kidnapping as a crimit 
act and warned that its politic 
consequences would be “a cL 
ing of ranks among the atm 
forces, a confirmation of t- 
suspi cions of the extreme tig 
and a strengthening of t 
country’s latent anti-cominc 
ism.” 


Opposition groups are also 
urging the public to register to 
vote, as a probable prelude to 
a “no” campaign 
According to calculations 
drawn from the electoral regis- 
try and the government 
national statistical institute, 
only 20 per cent of Chileans 


Mexico ruling party rebels launch platform 


BY OUR FOREIGN STAFF 


Argentine pool 
prize a record 


THE DEMOCRATIC CURRENT, 
a dissident faction of the ruling 
Institutional Revokttionaty 
1 Party (PRI), this week launched 
a “democratic proposal” criti- 
cising governsnerft policies and 
calling for reformist party 
members and progressive 
groups to forge democracy in 
, Mexico. 

The proposal, which amounts 
to an electoral platform for the 
1988 presidential race, o ffers a 
sweeping appeal to the PKTs 
corporatist sectors • — peasants, 
workers and “popular” urban 
classes, it calls for reinstate- 
ment of traditional populist 
programmes including subsidies 
on basic foodstuffs and expand- 
ing social security coverage, 
and reiterates the Democratic 
Current's proposals to suspend 
or limit service payments on 
Mexico’s BlOObn foreSgn debt. 

Just a week before the P5U 


INFLATION FOR the month 
of August was &2 per eea U 
bringing Mexico’s annualised 
inflation rate to a record high 
of 1819 per cent, the Banco 
de Mexico, the central bank, 
reported on Wednesday. 

Price increases for petrol, 
urban transport; «*WMng and 
housing fuelled the Jump in 
the consumer price index, the 
second-highest increase for 
Ah year after April’s 8.7 per 
cent 

Accumulated inflation for 
the first eight mouths of the 


year readied. 81 per cent, 

according to the figures: 

The rate for August 1986 to 
August 1987 contrasts with 
last year’s annual inflation 
rate of 92 per cent. 

Analysts say that persistent 
intf dfanHng inflation 
remains the main worry for 
Mexico’s economy which is 
experiencing a mild recovery 
in an environment of high 
liquidity owing to expansion 
of exports, capital repatri- 
ation and an influx of fresh 
credit. 


convenes to debate its electoral 
platform for next year's presi- 
dential race, the DC denounced 
the government’s economic poli- 
cies as a “ neo-colonM project ” 
and said political practices were 
despotic. 

Flandtiag a Mexican tradi- 
tion that prohibits directly 


criticising a sitting president, 
the DC proposal calls for the 
building of a “national move- 
ment” against tiie ** imposition 
of continuity.” a reference to 
President Miguel de la Madrid’s 
pledge to continue his eco- 
no mifl programme tint has 
eroded purchasing power by 50 


per cent In nine years while 
fcberafcsiog trade. 

. Analysts believe the presi- 
dent will choose his successor 
from those who assure con- 
tinuity of his economic policies. 

The DC challenges Mr de la 
Madrid’s right to choose his 
successor and demands that 
elected FBI delegates select the , 
party's presidential contender. 

The DC is credited by many 
analysts with having precipi- 
tated the decision last month 
by Mr de la Madrid to announce 
the six finalsdste for the party 
candidacy and have each of 
them present his platform in a 
speech televised nationwide. 

Behind tiie Scenes. politicking 
among ” precandidates ” and 
consultations with Mexican and 
FBI party support bases con- 
tinue as toe president prepares 
to announce his successor, in 
toe next four weeks. . 


By Tim Cootie in Buenos Air* 


A RECORD first prize of 2L£ 
australs ($9m) was paid c 
yesterday on Argentin- 
weekly football pools compE 
tion, known as the “ prode ”, 

The prize money is shared 1 
tween 17 winners who corte* 
forecast the results of 13 fo 
ball matches played betwe 
last Saturday and Wednesd 
night 

No one had won in the t 
preceding competitions, allc 
ing toe prize money to be r 
led over. More than 6m tick* * 
were sold same to punters in 
neighbouring countries. 

The pools in Argentina t 
organised by the Ministry 
Social Welfare and some 3: 
per cent of the total incoi 
goes towards financing heal 
ana welfare programmes. 


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7 



financial limes today September 11 1987 


WORLD TRADE NEWS 


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EC set for row 
over S. Korean 


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a 


BY OUR -FCMEJCM 5TAFF.- : 

THE EUROPEAN Community is 
preparing . /or a' serious trade 
row with' South -Korea I jover 
claims that the country's anti- 
counterfeiting laws discriminate 
unfairly in favour of. US ex- 
porters. V" .... 

France and Britain are to ask 
the European -Commission to 
take a tough line. in talks early 
next month with the Seoul 
Government, which they accuse 
of dragging its feet on EC 
demands for adequate patent 
protection for its exports. They 
want to persuade their EC part- 
ners at a meeting of Foreign 

South Korea plans to send a 
team to the US to boost 
purchases of US machinery 
and reduce its dependence on 
Japanese goods and' the trade 
imbalance with the US, AJP- 
DJ reports from Seoul. 

The Trade and Industry 
Ministry said the miss ion 
would visit the US next week 
and was expected to buy some 
$400m worth' of vehicle parts, 
machine tools and other 
Items. 

The 20-member delegation 
will visit Pennsylvania, 
Washington, Texas and other 
stales. 


Ministers in Denmark next Mon- 
day to send a stiff warning to 
South Korea. 

The ' Commission - has - already 
hinted to Korea and to member 
states’ officials that it might be 
prepared to withdraw the im- 
part duty concessions the Com- 
munity offers Seoul under the 
Generalised System of Prefer- 
ences (GSP), although EC 
Governments are a long way 
from agreeing to such . a move. 

It would be the first time^hat 
the EC has used the GSP as a 
trade weapon;' several, member 


states oppose the idea of issuing 
such threats over a system 
originally, designed to help de- 
veloping countries. But France 
and Britain, supported by West 
Germany, are keen to ensure 
access to a fast growing economy 
which - Is still bristling with 
trade barriers. 

While .the . heart of the dis- 
pute with South Korea is tech- 
nical, it has resulted in serious 
practical disadvantages for EC 
companies selling chemicals, 
pharmaceutical and computer 
software in South Korea — the 
Community exports most sensi- 
tive to counterfeiting. 

'.Fears were aroused when 
Seoul struck a bilateral accord 
on patent infringements with 
Washington . last year, under 
pressure from US businesses 
increasingly frustrated with the 
way that that Korean 
businesses were copying their 
imports. 

The deal gave the US two 
key advantages, which the 
Community - now wants to 
share. Zt allowed US products 
to have retroactive patent pro- 
tection going back seven years 
(or five in the case of 
software). That meant that any 
Korean product launched in 
the past seven years and copied 
from a US patent had to be 
taken off the local market. 

. The second key benefit was to 
allow US exporters to convert 
patents relating to manufactur- 
ing process into straightforward 
product patents. This is 
designed to protect products in 
the early stage of development 
- Korea, at a meeting with the 
Commission last Spring, indi- 
cated that it would in principle 
give EC exporters equal treat- 
ment with the US. Korean copy- 
right legislation passed in July 
came as a welcome move against 
the general problem of counter- 
feiting for the Community. 


Worldwide 


EBS-S. 

venture 


1/5 1 1 


lish 


fiy Dairld White: hi Madrid 

EDS of the US yesterday 
signed «- co-operation agree* 

- _m*nt .with .Spain’s KPjMate 
telecemittmrieattons group 
Telefonica, which includes a 

T; i'- 

Hr; Enrique Kuo, .presi- 
dent: the new to* Angels®" 

based Joint venture, said he 
expected tt to take a* muck 
as 4®, per cent uf the world 
market for- packebowitcJiing 


W» aim of the. Joint -ven*. 
tare is essentially, to market, 
Telefonica’s Tesy* system, 
which has been sold to 
ffrmMfa qmf jMoflBfc: But 
Mr Gary Fernandes, president 
of EDS 'International, 
expressed hepes fOr “ extend- 
ing wellbey trad that in the 
future.** 

EDS wUI hold 51 per cent 
of the venture,, provisionally 

named -Telecomnqmiratioiis; 
Data Services, -.L which .wfll : 
design add distribute fcnw^ 
misison networks. =' Mr uFer- 
nandes said it would be active 
in the/. Europe m," Asian and 
Worth American Markets. «• 

The world market for 

packetswiteblng networks to 

estimatml at ddfidm a year 
and Js expected to rise to 
|L9bn a year in ' five .years? 
time; The - Joint venture’s 
initial sales are put at 9150m 
a year- . j ■ 


Taiwan 
loans for 
US imports 


TAIWAN, eager to head off 
protectionist pressure from 
Washington, is for the. first time 
.offering loans, to. US banks 
finance imports of US products, 
Reuter reports front Taipei. 



Bank of California and Chemical 
Bank, -according to Mr Kong 
Kuang-wei, vice president of the 
Export-Import Biu>k; “ We hope 
the loans will, help boost Im- 
ports of American goods and re- 
duce Taiwan’s trade surplus with 
Washington,’* he said. 

. Mr Kung said the loans to 
each US bank would he from 
with maturities rang- 
ing from two to -five years at 
interest rates from 5J> per cent 
to 635 per cent. '• 

He said American banks could 
use the rereading facilities to 
help US exporters promote sales 
of: machinery, precision instru- 
men'ts 1 'and industrial raw 
materials , to Taiwan; 

They could add a spread of 
about 1J5 per cent interest when 
they re-Jend to Taiwanese im- 
porters, he added. 

Taiwan’s trade surplus with 
the US rose to a record $10J93fm 
in the first eight months of 1987 
The surplus is expected to hit 
an all-lime high of $16bn by the 
end of 1987, compared with 
$13.6bn last year, trade officials 
said. 


Skoda to market new 
hatchback next year 

BY JOHN GRIFFITHS 


CZECHOSLOVAKIA’S long- 
delayed first contender in the 
mainstream market for front- 
wheel-drive hatchback cars 
was unveiled at Brno’s' Engin- 
eering Trade Fair yesterday. 

The so-far unnamed 1.3 litre 
car, styled by Bertone of Italy 
and part-engineered by Porsche, 
is scheduled to ; go into produc- 
tion nest year...: 

The first year’s intended out- 
put of 70j000- units is ear- 
marked for the Czech domestic 
* market Exports to left-hand- 
drive markets are planned to 
begin in 1969, and to right-hand- 
drive marieets like ■ the UK in 
the first half of 1990. ' 

By the early 1990s, Skoda 
hopes to be producing. a range 
of cars at the rate. « 400,000 
units a year,; Including saloon, 
estate, van .and. coupe variants 
of ■ the - new^ iurishbat*. ’* • r ' ; 


The delays which have 
affected the new car mean that 
Skoda’s existing rear-engine 
Estelle models will continue 
to be produced alongside the 
hatchback next year. The car 
..shown at Brno is only a proto- 
type, with no- final deci sion yet 
made on whether an Isuzu or 
Nissan-based engine will power 
jt Both Japanese producers 
are- seeking licences to produce 
power units for it. 

So far, Skoda has spent over 
9100m on importing production 
equipment from the West for 
the new model. Among UK 
companies involved in the pro- 
ject are John Brown Antonia- 
tion and Cross Knowslejy who 
between them have been 
awarded contracts worth £&3m 
for assembly line and machining 
work. ■ .. :■ 


Embraer’s largest sale 

BY ANN CHARTERS IN SAN PAULO 


EMBRAER, Brazil’s state- 
controlled aircraft .manufac- 
turer, has sold 50 Brarilias 
commuter aircraft to Texas Air 
for 9283.6m, Finance for the 
contract, EmbraeFs largest so 
V fer in value terms, has- been - 
< arranged through a pool ; of 
international ba n ks. - coordi- 
nated by Manufacturers Han- 
over. 

The fin aWffl "g is being struc- 
tured as a 15 per cent supplier 


credit, 75 per cent buyer credit 
and 10 per cent as the down 
payment with Embraer borrow- 
ing abroad for its portion. 

Texas Air will take delivery 
q£ flie 30-seater aircraft up 
until 1990. 

Embraer is currently nego- 
tiating with West Air, another 
US airline, for the .sale of 20 
more Brastiias, The airline 
currently operates thre of these 
commuter aircraft 


HK plans new container terminal 


BY DAVID DODWELL IN HONG KONG 


HONG KONG will this month 
Invite bids to develop a new 
storage and berthing area at the 
territory’s Kwai Chung con- 
tainer terminal as it tries to 
cope with hectic growth in 
container traffic. 

The new development to be 
called terminal seven, will cover 
about 32 hectares of reclaimed 
land in Victoria harbour and 
will have three berths; ft is 
likely to cost more than HK92bn 
to -complete. Tender documents 
will be available from Septem- 
ber 25. 

Hong Kong’s port has over- 


taken New York to become the 
world’s second busiest container 
terminal. In 1686 it handled 
2.77m containers, compared 
with 2.34m containers in New 
York, and 2.91m in Rotterdam. 

In the first half of 2987, con- 
tainer throughput amounted to 
■1.61m 20 foot equivalent units, 
a 32 per cent increase from 
1.22m units in the first half of 
1986. This reflects the meteoric 
growth in direct and entrepot 
trade recorded in Hong Kong 
over the past year. 

Hong Kong’s container port 
committee has is the past based 


its forecasts for port expansion 
on an assumption of 9 per cent 
traffic growth per year. How- 
ever, traffic grew by 21 per cent 
last year, and more than '30 per 
cent so far this yen’, putting 
the existing five terminals at 
Kwai Chung under extreme 
strain. 

The first berth of terminal 
six, the HK92bn three-berth 
facility being built by Hong 
Kong International Terminals 
owned by Li Hashing's Hutchi- 
son Whampoa, will not be ready 
until the middle of next year, 
with the terminal unlikely to be 


complete before the middle of 
1989. 

Prospective bidders that have 
already shown interest include 
Sir Yue Kong Fao’s Wharf Hold- 
ings (which controls another of 
the existing facilities, Modem 
Terminals Ltd), and two main- 
land Chinese corporations— the 
China International Trust and 
Investment Corporation and 
China Resources, which operates 
in Hong Kong primarily as a 
trading company. Tenders are 
likely to close at the end of 
January, with the successful 
bidder chosen by April. 


Conflict ‘may hit shipping recovery’ 


BY OUR HONG KONG CORRESPONDENT 


RECENT SIGNS of recovery in 
the world shipping market 
could be short-lived, with 
buoyancy still vulnerable to 
Middle East conflict, subsidised 
new buildings in countries like 
Japan, and low levels of ship- 
demolition. according to Mr 
William Purves, chairman of 
the Hongkong and Shanghai 
Banking Corporation, one of 
the world's leading shipping 
industry’s financiers. 

“ The economic fundamentals 
of an imbalance between 
dPTTianri and supply remain," 
Mr Purves told members- of the 
Hong Kong Shipowners’ Asso- 
ciation yesterday. He said 


fundamental oversupply was 
being masked by political 
factors. 

Much of the current buoyant 
demand for vessels was due to 
a “ surge in demand for 
’ anxiety ’ crude ” as oil majors, 
fearing renewed conflict in the 
Middle East sought to build up 
reserves, Mr Purves said. He 
noted that over 70 VLCCs were 
fixed out of the Gulf in July, 
the highest level of chartering 
activity since 1977. 

He said demand had fallen 
sharply in recent weeks as 
stock building programmes 
have been completed, with 
chartering rates falling by 25 


per cent from peak levels in the 
middle of August. 

Container operations had 
been buoyed by global growth 
in containerisation, and the 
collapse almost a year ago of 
US Lines, but demand for dry 
bulk cargoes was sluggish, he 
said, with demand falling about 
25 per cent short of supply. 

He complained that ship- 
builders were still subsidising 
shipbuilding, referring to a 
Japanese yard earlier this year 
completing a “ first class ” 
Panamas for $16.5m. 

“ The yards involved must 
suffer enormous losses at these 
levels,” he said, insisting that 
daily rates would have to rise 


by at least 912,000 to cover the 
true cost of a new Panamas. 

** These rates are not achieve- 
able in today’s market, and 
therefore most new building 
orders may be regarded as 
speculative," he said. 

Just four tankers or combina- 
tion carriers weie demolished in 
July, amounting to 325,000 dwt, 
he said, noting that this was 
“ the lowest monthly total since 
September 1983," and compared 
with demolition last year 
averaging 1.3m tonnes a month. 

" Rates will remain at 
uneconomic levels until a sub- 
stantial number of vessels are 
taken off the market,” he said. 


Big petrochemical 
complex in Bengal 


BY JOHN ELLIOTT IN NEW DELHI 


PEROCHEMICAL engineers 
and contractors from the US, 
Europe and Asia are to share 
orders worth about $30m over 
the next four years for con- 
struction of India's second 1 ir- 
gest petrochemical complex at 
Haldia in the north eastern 
state of West Bengal. 

Linde of West Germany and 
Chemtex of the US will to- 
gether be taking a 12.5 per cent 
equity stake in the Rs 14.7bn 
(51. 14 bn) project. 

Other companies, including 
Technimont of Italy, Phillips 
Petroleum and Luuunus of the 
US, wUI be involved in equip- 
ping the naphtha-based plant. It 
is being promoted by Mr R. P. 
Goenka, a leading member of 
one of India's five largest in- 
dustrial frnnilites. in partner- 
ship with the Communist-run 
West Bengal State government. 

After long delays, the project 
is soon expected to be given 
final clearance by the Indian 
Government. On Wednesday 
the financing arrangements 
were approved in Bombay by 
the board of the Industrial De- 
velopment Bank of India, the 
main government-owned finan- 
cial institution involved. 

This indicates that the 
government wants final clear- 
ances soon from a joint meeting 
of financial institutions fol- 
lowed by final approval from a 
meeting of top government 
secretaries in New Delhi. 

The plant will be the first 


large-scale petrochemical com- 
plex to be developed in India 
outside conventional public sec- 
tor corporations — it is an ex- 
ample of the new joint public- 
private sector which is being 
used by state governments to 
encourage industrial develop- 
ment 

The Haldia cracker and asso- 
ciated complex is expected to 
help rebuild the industrial for- 
tunes of West Bengal and its 
state capital of Calcutta, which 
have only recently started to 
revive after years of decline. 

The main cracker will have 
a production target of 125,000 
tonnes a year using Linde 
naptha technology. Technimont 
of Italy is co-ordinating tech- 
nology from Himont of the US 
and Mitsui of Japan for 63,000 
tonnes a year of polypropelene. 
Phillips Petroleum is providing 
technology for 80,000 tonnes of 
high density polyethylene. 

Britis h merchant banks, in- 
cluding Kleinwort Benson and 
Lazards. have been offering 
financial packages for the 
S227zn of foreign exchange, 
which will include export 
credits and other forms of 
funding. 

Equity will total Rs3J27bn, 
12.5 per cent of which will be 
subscribed by Linde and Chem- 
tex, 12.5 per cent by Goenka 
family interests and 26 per 
cent by the West Bengal State 
Government The rest will be 
raised from the general public. 


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8 


Financial Times Friday September 11 198? 


UK NEWS 


Voluntary housing bodies 
to be given central role 


Britain and France 


BY PETER RIDDELL AND ANTHONY MOREFON 


aim to co-operate 
on arms purchasing 


Leading British consulting 
engineers merge operations 


BY TERRY DODSWORTH, INDUSTRIAL EDITOR 


VOLUNTARY HOUSING associa- 
tions will be given a central role in 
the provision of subsidised homes 
and flats for rent under plans to be 
outlined in a government white pa- 
per (policy document) later this 
month. 

This will involve sweeping 
chang es in government support for 
the associations to produce a more 
flexib le system of grants so as to al- 
low larger-scaJe raising of finance 
from the private sector. 

Mr William Waldegrave, the 
Housing Minister, yesterday con- 
firmed that a housing white paper 
would appear shortly. This will be 
the prelude to a bill due at the 
beginning of December. 

Aleady approved in principle by 
ministers, the white paper will 
‘cover the relaxation of present rent 
controls on new lettings, provision 
for local authority tenants to trans- 
fer to different landlords and the 
formation of government-backed 
Housing Action Trusts to take over 
local estates. 

There is, however, a continuing 
argument between the Treasury 
and the Department of the Environ- 
ment about the level of subsidy, in 
particular the filing of hnnsing ben- 



William Waldegrave: plans 


efit to take account of the higher 
level of private rents on new let- 
tings after deregulation. 

There is likely to be a maximum 
cut-off point and the Treasury is 
seeking to minimise the extent of 
change. 

Agreement has already been 
reached, though, on expanding the 
role of housing associations which 
ministers hope will become large- 
scale providers of rented housing, 
taking over from local authorities. 

The new approach was foreshad- 


owed yesterday by Mr Ian Grist 
parliamentary undersecretary at 
the Welsh Office. 

In a speech to the Welsh Housing 
Associations in Llandudno, north 
Wales, he said the present 30 per 
cent celling on government grants 
(as a percentage of the capital cost 
of new schemes) would be abol- 
ished because it was too low to al- 
low building at affordable rents. 

Mr Grist said that instead- the 
Housing Corporation, which fi- 
nances housing associations, would 
operate with an average grant of no 
more than 50 per cent 

This flexibility is meant to encou- 
rage the associations to raise pri- 
vate-sector finance with official 
grant backing, given that they will 
also have scope to charge some- 
what higher rents than now. 

Ministers believe that the oppor- 
tunity to go higher than the present 
30 per cent celling will remove the 
present barrier to private sector 
funding. 

A detailed consultative paper on 
financial arrangements for hnnsing 
associations will be published next 
week 

Legislative programme Page 9 
Editorial t-nr n mo rtt Ppgg 2ft 


BY LYNTON McLAW 


Government split over future 
of fourth national TV channel 


BY RAYMOND SNODDY 


THE GOVERNMENT is divided 
over the future of Channel 4 and 
whether Britain's fourth national 
television channe l should be turned 
into a non-profrtable trust, be freed 
to sell its own advertising time or 
be fully privatised. 

A proposal from Mr Douglas 
Hurd, the Home Secretary, that the 
channel be set up as a separate au- 
thority and become a non-profit- 
making trust has been rejected by 
Mrs Margaret Thatcher, the Prime 
Minister, as not radical enough. 

The Prime Minister, who is chair- 
ing a cabinet sub-committee on the 
future of British broadcasting pre- 
paring for a comprehensive broad- 
casting bill to be introduced in the 
npit session of parliament, has 
asked the Home Office to think 


again. 

Channel 4, which began broad- 


casting nearly five years ago, is at 
the moment a wholly owned subsid- 
iary of the Independent Broadcast- 
ing Authority. It is funded by the 15 
ITV companies who pay IT per cent 
of their net advertising in the form 
of an annual subscription to pay fin' 
Channel 4 and the W elsh Fourth 
Channel In return the ITV compa- 
nies sell the channels airtime. 

Mrs Thatcher, it is believed, has 
noticed that the channel is now 
producing a surplus for the ITV 
companies. Mr Jeremy Isaacs, the 
outgoing chief executive, said re- 
cently in public that the ITV compa- 
nies were now taking 120m a year 
more in Channel 4 advertising time 
than they pay out in subscription. 
In the year to March 1987, Mr Isa- 
acs said, the ITV companies had 
sold advertising worth £152 2m for 
the channel compared with the 


£l39J9m paid in subscription to fund 
Channel 4. 


There are growing signs that a ' 
compromise solution win be found 
nn^ or which rhannpl 4 will remain 
a subsidiary of the IRA, that there 
will be complementary ytwfalmg , 
with ITV to protect Channel 4’s pro- 
gramming remit but that it win be 
financed by selling its own advertis- 
ing time. 


The future of Channel 4 is one of 
a package of issues being consid- 
ered by the Government designed 
to increase the co mpetitiv e pres- 
sures on commercial television in 
Britain. The ITV companies and 
TV-am, the breakfast television 
company, have at the m o ment a 
television advertising monopoly 
which brings in more than f 1 2hn {g 
advertising revenue a year. 


BRITAIN and France are to at- 
tempt to extend co-operation on the 
procurement of defence equipment 
for their armed forces. 

A two-day conference on the pos- 
sibilities of increased co-operation 
is to be held at Lancaster House, 
London, next week. It will be at- 
tended by French and British de- 
fence equipment companies and 
service and procurement personnel 
from each country. Lord Trefjgarne, 
the mirrirfpr of state for defence 
procurement, wiH open the confer- 
ence on Thursday, September 17. 
There will be a dinner at Hampton 
Court in the evening, hosted by Mr 
George Younger, the Defence Sec- 
retary. 

The aim is for Britain and France 
to set out the defence equipment 
each country wants over the next 
three to five years. These require- 
ments will be in terms of broad 
specifications, setting out what the 
armed forces want equipment to do, 
rather than specifying individual 
products by name. 

The delegates at the conference 
are to explore the scope for "recip- 
rocal purchases of equipment devel- 
oped or produced in one country 
which could meet the needs of the 
other," the Ministry of Defence said 
yesterday. 

This is distinct from programmes 
of collaborative procurement, such 
as the Anglo-French Jaguar fighter 
aircraft programme, where the for- 
mer British Aircraft Corporation 
ami Breguet Aviation of France col- 
laborated on the design and produc- 
tion of the aircraft, through a joint 
company, Sepecat, formed in 1966. 
The aircraft are powered by the 
Anglo-French Rolls-Royce Turbo- 
meca Adour engine. 

Westland of Britain and Aerospa- 
tiale of France collaborated on the 
production of helicopters. 

The idea of reciprocal purchasing 
stems from an initiative between 
Mr Peter Levene, the chief of de- 
fence procurement at the MoD, and 
Mr Jacques Chevallier, his French 
counterpart They agreed earlier 
this year to explore increased co-op- 
eration in defence p r oc ur ement be- 
tween the two countries, to avoid 
duplication. French requirements 
are similar to Britain's at a time 
when the defence budgets of the 
two countries are under pressure. 

Last year, the MoD placed a con- 
tract for remote-controlled mine 


disposal systems for the Royal 
Navy with the French company, So- 
ciety EGA in partnership with Hon- 
eywell Leafidd of foe UK At foe 
same time, the French Ministry of 
Ddence confirmed foe purchase of 
Racal-Decca navigation radars for 
the French navy. 

These orders were not linked for- 
mally, foe MoD said at. foe time. 
They reflected the readiness of 
each country to purchase products 
from the other when they offer the 
most cost effective solution to de- 
fence requirements. The contracts 
followed a meeting between Mr An- 
dre Giraud, foe French Defence 
Minister, and Mr Younger when 
they agreed on the importance of 
further co-operation in defence pro- 
curement. 

The MoD accepts that, even with 
a successful outcome to foe confer- 
ence, there will be areas where the 
two countries will compete with 
each other. The same companies 
that find themselves on ride of 

reciprocal purchase of some equip- 
ment could compete with each oth- 
er for other equipment orders. 

Next week's conference is to con- 
centrate on eq u ip m e n t for foe Brit- 
ish French armies. Other con- 
ferences are planned for next year 
on the equipment needs of the Brit- 
ish and French air and naval forces. 
The next conference is likely to be 
in France. 

The Ministry of Defence has in- 
vited 50 British and 50 French ma- 
jor suppliers of army equipment to 
a single representative to foe 
conference next week. There will be 
50 repres en tatives from Mt-h of foe 
British and French armies. 

Mr Levene's defence procure- 
ment department has prepared a 
booklet for the French to explain in 
detail British defence procurement 
policy, to help French companies 
gain access to the British market 
No such help is expected from the 
French which could have eased the 
access of British defence companies 
to foe French market but the MoD 
says it is likely that the French 
need for "reciprocal purchases" will 
be greater fowri Britain's need. 

The projects to be discussed at 
foe conference are expected to be 
"medium sized," below about £25m 
in value. The majority of UK-based 
defence equipment contractors fall 
in this category. 


TWO of Britain's leading consulting 

engineers. Freeman Fox and John 
Taylor, are merging their world- 
wide operations in a move aimed at 
counteracting inc reasing interna- 
tional competition. 

The deal will create a group with 
1,009 in offices all over the 
world and a c ur re n t workload of 
projects worth more than £10bnon 
all six continents. It will also give 
foe joint fatringgt a similar scale to 
that enjoyed by many of its l eadin g 
international competitors, apart 
fro m some of foe larger American 
consultancies. 

“By merging we are creating an 
organisation with enormous techni- 
cal resources and wide experience, 
which will enable us to compete ef- 
fectively for many important inter- 
national projects which neither 
company could have secured on its 
own,” said Mr Gwilym Roberts, 
joint chairman of the group, and 


currently senior partner at John 
-Taylor, last night. 

The new group, which will have 
annual revenues of about £30m and 
profits of a little under Elm, is aim- 
ing to gain competitive advantage 
parity by increasing fo® spread of 
its activities. 

Freeman Fox has made its inter- 
national reputation as a bridge de- 
signer, with a tradition stretching 
back to foe Sydney Harbour Bridge 
wnH finding foe more recent 
Humber Bridge, the largest single 
span in foe world. It is also respon- 
sible for the ambitious cross-har- 
bour tunnel in Hong Kong, and the 
Tn».« transit railway in foe same 
city. 

John Taylor's expertise is m wa- 
ter-related projects. In the last few 

years it has won a large number of 

contracts in the Middle East in wa- 
ter supply, desalination and sewer- 
age treatment projects, inten d in g a 
waste water programme in Cairo 


Sales growth 

disappoints 

retailers 


Laying down law to 
insurance salesmen 


By Ralph Atkins 

RETAIL sales growth slowed in 
Ang iKtt, frustrating retailers’ ex- 
pectations after a better-than- 
forecast increase in July. 

The latest Confederation of 
British Industry/ Financial Times 
quarterly survey of distributive 
trades shows that 58 per cent of 
retailers questioned reported an 
increase in sales In August com- 
pared with the same month last 
year but 19 per cent reported a 

rfpflmp. 

The balance reporting a rise 
was the lowest since March and 
was considerably less than pre- 
dicted by retailers in last month's 
survey when official figures 
showed retail sales rising sharply 
to a record leveL 

Yesterday Mr Nigel Whittaker, 
chairman of the sur vey panel, 
described the August survey re- 
sults as “disappointing” although 
he said better grow t h was antic- 
ipated in September. 

However, he said: “These ex- 
pectations most be semi against 
a background of rather optimis- 
tic hopes tboughont the year, 
w hich have mostly been unfiil- 
fffled.” 


BY NICK BUNKER 


THE WORKING lives of some of 
Britain's most unpopular people - 
foe life assurance salesmen - may 
never be the same again following 
publication of a new code of con- 
duct 

Drawn up by the life Assurance 
and Unit Trust Regulatory Organi- 
sation (Lauteo) it would effectively 
outlaw many of the fbot-in-the-door 
tactics which the public has come to 
associate with foe selling of life as- 
surance or double-glazing. 

The code is acential dement in a 
draft rule book which Lautro pub- 
lished yesterday in connection with 
its attempt to become one of foe 
new self-regulatory organisations 
(SROs) for Britain’s financial ser- 
vices industry. 

It bans life assurance salesmen, 
for instance, from contacting unsus- 
pecting members of the public at 
"unsocial hours," whether over foe 
telephone or on the doorstep. . 

Sticking foe foot In tbe door is al- 
so forbidden since tbe code says foe 
salesman “shall recognise and re- 
spect, promptly and courteously, 
foe right at the investor to termi- 
nate Hw call at any time." 

Nor will life assurance salesmen 
be per mi tte d to use unlisted tde- 


Details, Page 10 


The never-ending search for the perfect bearing. 










No doubt the computer has made office fife run 
more smoothly. But have you considered the levels of 
precision ieqpnred to provide such efficiency? 

Take the actuator, which has a seemingly sample task 
in the magnetic disc drive. By acceptinga signal it moves the 
bead to the specified track and reports back when tbe head 
is ready to read or write. 

Fine adjustments, measured down to rmffionths 
of an inch, can fiteiafiy make thedifference between 
unreliability and excellence. Hie same accuracy is essential 
for the bearings. Consider fee sophisticated Winchester disc 
drive - a model which both improved access time and, 
with a trade density of over 1,000 trades per inch, more 
than tripled the storage capacity. 

SKFs brief was quite simply to create ne ar* 
perfection - a spindle bearing unit rotating so accurately 
that no read/write errors would occur from unwanted disc 
movement 

The success of the venture can be judged by a 
ament aim - to double track density levels to 2,000 

tpi, for which bearings of even greater predsion are needed. 

At SKF our search for perfection will go .on for ever. 


Tripling computer storage capacity: 


for high track density . . 


and safe data transfer . . . 


Down to the microworid of the hearim 




mm 




Our search for new answers takes us deep into the 
micro-universe of the bearing - where micro-changes of a 
10,000th of a millimetre are now common-place. And new 
bearing designs can yield energy savings of up to 80%. 

For this, high standards of metal-working precision 
are req uired -and ‘near-absolute’ accuracy has to be main- 
tamed from steel purity through computerised design to 
application. ^ 

Now, by harmonising new theory with the reality of 
newtedmologies we have shown how bearing life -and 
reliability-can be prolonged nigh on indefinitely: 

75 years of dose customer co-operation has Erven 
us the expertise to create a virtuallv hnnnrii^ — zf 


which is claimed to be foe biggest 
of its kind in foe world. 

Mr Peter Banks, John Taylor’s 
managing director and designated 
group managing director of foe 
combined concern, said yesterday 
that the two concerns would also 
have an improved geographical 
coverage of the market * 

“We have large projects ia foe 
Middle East and Freeman Fox in 
Hong Kong, and we are both active 
elsewhere. That gives you the intel- 
ligence. you need to indentify pro- 
jects,’’ be said. 

Mr Banks added that new compa- 
ny would also be seeking to achieve 
economies by. the more effective of 
specialists which both companies 
were now being forced to provide. 
Clients, he said, were expecting far 
more from services from consulting 
engineering companies, which bad 
added to foe overhead load they 
bad to carry. 


phone numbers, or rubbish the 
products of companies other than 
their own. The salesman "shall not 
make any statement which he 
knows or ought reasonably to know 
to be untrue, or partly untrue or ex- 
aggerated," the code says. 

Even foe salesman's business 
card - which he will have to give to 
every potential customer - will 
have to conform to new standards. 

The rule-book also contains bad 
news for those insurance brokers 
who are accustomed to being invit- 
ed by life companies to “sales con- 
ferences” held in foe Seychelles or 
on board cruise liners. 

The code of conduct says foe en- 
tertainment offered to brokers 
must not exceed “what is normal or 
reasonable” and that gifts must not 
be greater than £25 in any one year. 

Lautro’s rule-book will now be 
scrutinised by the Securities and 
Investments Board, foe industry’s 
central watchdog, and by foe Office 
of Fair Trading. The SIB said last 
night that it hoped that following 
completion of this process lautro 
and foe other aspiring SROs would 
be officially approved by early De- 
cember. 


Hone 


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- ^ 






UK NEWS 


9 






11 1987 


Peter Riddell previews an unusually busy parliamentary session 

Full steam ahead for Thatcher Government 


THE CABINET yesterday held 
its first full meeting for six 
weeks, symbolising the end of 
the summer holidays la White- 
hall. 

While Sirs Margaret Thatcher 
has, charade risitcally, been 
back at work for some time, 
ministers and senior officials 
have generally only returned to 
their desks this week, to face 
one of thoir busiest autumns for 
many years. 

Not only is there the usual 
autumn public spending review, 
but final decisions are being 
taken on the bills which formed 
the centrepiece of the Queen's 
Speech on June 25, 

The key bills for this session, 
with final dates still to be 
agreed with the Government’s 
business managers, are:. 

• Education. Bill due in 
November. Decisions already 
taken on proposals for a 
national core curriculum, provi- 
sion for schools to opt out of 
local authority control and dele- 
gation of budgetary control, but 
there will be consultation until 
the end of this month. 

• Housing. White paper to be 
published in about a fortnight 
on proposals for tile relaxation 
of rent controls and the right to 
transfer of local authority 
tenants to other landlords. This 
will be followed by a bill, prob- 


ably In early December, though 
there is stiU argument with 
the Treasury over the level of 
bousing -.benefits for those 
renting. . 

• Rates reform. Bill likely in 
November, earlier than pre- 
viously. expected, with the aim 
of a second Commons reading 
and start of the committee 
stage before Christinas. Key 
decisions on the spreading of 
the transitional phase were 
taken at the end of July and 
environ ment ministers are on a 
nationwide tour to explain and 
justify the -community charge. 

• Immigration, Bill expected in 
November or December to 
tighten controls on settlement 
and visitor;. 

• Licensing hours. Bill due in 
late October or November to 
relax pub opening hours. 

• Industry. Measure doe in 
about November, after several 
years’ consultation, to introduce 
a levy on blank audio tapes, 
with extensive reform of the law 
of copyright and intellectual 
property rights. 

• Union members* rights. Bill 
due in late October to extend 
the use of ballots and the pro- 
tection of individual workers. 

Some measures have already 
been published, notably the 
criminal justice and local 
government bills, which were 



Norman Tehbifc former “Star 
Chamber** member 
lost at the general election. 
Home Office ministers have said 
they are reconsidering pro- 
posals on sentencing and crime 
prevention, and amendments 
will be put forward when the 
bill (currently in the Lords) 
comes to the Commons early 
next year. 

The measure to prepare the 
way for electricity and water 


Lord Young: may join arbi- 
tration commit ee 

privatisation (the Public 
Utilities Transfer and Water 
Charges Bill) will have its 
second reading on October 21, 
the day when the Commons 
returns from its summer recess. 

The iM«mum political pres- 
sure to make amendments on 
key bills will come in February 
and March during Commons 
committee stages and in the 


John Major: intensive dis- 
ctuKfons on spending 

May-to-July period in the Lords. 

This autumn, ministers will 
also be seeking to reach pre- 
liminary decisions on the 
structure both of the electricity 
industry after privatisation and 
of broadcasting, for measures 
in the 1988-89 session. 

On the familiar seasonal time- 
table, this week has also seen 
the start of intensive bilateral 


discussions between Mr John 
Major, Chief Secretary to 
the Treasury, and spending 
ministers over future plans, 
following detailed discussions 
between officials. 

The “ Star Chamber ** arbitra. 
tion committee Is again likely 
to be called into play in early 
to mid-October with Lord 
Whitelaw. the leader of the 
Lords, being the usual reluct- 
ant chairman. 

Possible members are Mr 
John Wakeham, Leader of the 
Commons; Lord Young, Trade 
and Industry Secretary, and 
provided their budgets are 
settled quickly, Mr John 
MacGregor, Minister of Agricul- 
ture and former Chief Secre- 
tary; and Mr Cecil Parkinson, 
Energy Secretary. 

On the economic front, this 
autumn will also see far- 
reaching discussions on possible 
full British participation in the 
European Monetary System and 
reforms to the personal tax 
system to be included in next 
spring's budget. 

In both cases, the key deci- 
sions will depend on the 
relationship between the Prime 
Minister and Mr Nigel Lawson, 
the Chancellor. The latter is 
said to have returned from his 
holidays full of ideas. 


Attack on housing 
policy misfires 


BY ANDREW TAYLOR 

AN ATTACK on government 
policy by five leading bousing 
organisations misfired yesterday 
after the Government confirmed 
that it would after all publish 
a white paper ahead of its pro- 
posed Housing BilL 

The Association of Metro- 
politan Authorities, Shelter, the 
Housing Centre Trust, the Insti- 
tution of Environmental Health 
Officers and CHAR, the cam- 
paign for single homeless, yes- 
terday published their version 
of a white paper in the belief 
that the Government would not 
issue one. 

However, the publication was 
preempted by Mr William 
Waldegrave, Housing Minister, 
who announced that a govern- 
ment white paper would be 
published shortly. 

Despite being caught off- 
haJanoe, the organisations 
strongly attacked the Govern- 
ment for failing to consult 
bousing groups over its plans 
to radically reform housing 
legislation. 

Mrs Sheila McKechnie, Shelter 
director, said proposals to end 
Rent Act protection for new 
private lettings and changes in 
methods of funding housing 
associations would lead to 
dramatic rent increases. 


She said housing associations 
in London and the south-east 
faced with escalating land 
prices and a reduction in 
grants, would end up renting to 
"yuppies” rather than trying 
to satisfy the housing needs of 
low income families. 

Mi x McKechnie claimed that 
housing association rent levels, 
averaging £25 a week for a 

one-bedroomed fiat in Ealing, 
west London, would rise to £50. 

Mr Maurice Barnes, vice- 
chairman of the Association of 
Metropolitan Authorities bous- 
ing committee, said government 
policy statements did not ex- 
plain how to reduce the large 
numbers of homeless staying 
in bed-and-breakfast accommo- 
dation at the expense of local 
authorities. 

He said the Government had 
produced no evidence to show 
bow its policies would help to 
reduce the huge backlog of re- 
pair and maintenance needed 
to restore public and private 
homes to an acceptable stan- 
dard. 

Not a White Paper. The 
Housing Centre Trust. 33. 
Alfred Place. London 
WC1E 7JV. £2. 



Honda denies 



h:;} 








it is seeking 
stake in Rover 

BY KENNETH GOODING, MOTOR INDUSTRY CORRESPONDENT 

HONDA OF Japan has no His company, in any case, 
- intention of asking the UK before even considering such a 
Government if It can buy a move, would want to see a suc- 
ahareholding in the state-owned cessful outcome to the latest 
Rover Group when the British joint venture with Rover for 
company is privatised, Mr . the development and produo- 
Satoshi Oku bo, chairman of tion of a medium-sized car to 
Honda Motor, said yesterday. replace the Civic and Ballade 
He also Insisted . that Honda for Honda and the Maestro and 
brad no wish to buy Rover’s car . Rover 200 scenes for Rover, 
assembly pflant at Cowley, near Mr Oknbo revealed that 
Oxford, where the UK group. Honda wants Rover to produce 
-produces the two companies* a model, which Honda has code- 
joint venture cars, as has been named YY and Rover calls AR8, 
- frequently rumoured. at the rate of 80,000 a year 

Nor does Honda have plans when it goes into production at 
to build a car assembly plant Longbridge, Bir mingham in 
at Swindon, Wiltshire, where it 1989. 

has a technical inspection This compares with the 5,000 
centre and intends to build an Ballades ana 3,000 Legends that 
engine factory. . Rover will produce for the 

"■—-Mr Okubo, speaking during Japanese company this year, 
the run-up to the Frankfort Mr Oknbo said that Honda’s 
motor show, said there had plans for an engine plant at 
been no approach by. Rover Swindon were cm schedule and 
management to suggest that construction would start soon. 
Honda should take some of the The plant would have an annual 
UK group’s equity. - . capacity of 70,000 engines. 

BMW and Jaguar 
increase car prices 

BY JOHN GRIFFITHS • 

BMW AND Jaguar are both sub- The increases had little appa- 

stantially increasing their UK rent effect on BMW’s UK sales 
new car prices. ' " which" rose to 85.898 compared 

The increase, now in effect the previous year, 

on the West German cars, is foe In the first eight months of this 
third fob year and averages 4.6 y ear sales have reached 28.521, 
per cent but reaches 10.80 per making *t likely that BMW 
cent on the high-volume SIS (GB) managing director Mr 
and 8181 models. The 3181, how- Paul Layzell’s forecast of 38,000 
ever, has been fitted with a sales this year will be exceeded, 
more powerful engine and Jaguar, which last month an- 
shares other specification nounced reduced half-year pro- 
changes to the 3-series range. fits id £45.7m (£67.4m), is 
BMW yesterday also blamed raising its prices by an average 
foe strength of foe D-Mark for of 7 per cent from tomorrow, 
foe increase. It brings to 99 per However, increases on some ver- 
cent the average rise imposed slops of its XJS coupe models 
since January. — also recently revised - — 

For the whole of last year, ranee up to 9.3 per cent 
BMW increased its prices by an Jaguar previously increased 
average of 16 per cent, under its prices in April by an aver- 
pressure from the rising D-Mark, age of 4 per cent 


DTI optimistic over 


car output increase 


BY JOHN GROTTOS 

VEHICLE PRODUCTION statis- 
tics from the Department of 
Trade and Industry yesterday 
lent support to foe contention 
by Mr Sam Toy, former chair- 
man of Ford UK, at the Frank- 
fort motor show that the British 
car industry was "on the road 
back.” 

The DTTs provisional esti- 
mates showed that car produc- 
tion . In August, seasonally 
adjusted, was 105,000 units. This 
compares .with 84,000 units in 
the same month a year ago and 
continued . . “foe encouraging 
trend apparent tins year.** 

Taking foe latest six months 
as a whole, output was. 10 per 


" cent above the previous six- 
month period and 17 per cent 
higher when compared with foe 
same six months of last year. 

-Production hi foe first eight 
months of foe year averaged 
95,000 units a month — foe 
highest for such a period in 
nine years. 

Commercial vehicle output, 
at a reasonally adjusted 19,400 
□nits, Improved on the dis- 
appointing June level of 18,400. 
However, taking the latest six- 
month period as a whole; out- 
put 1 was 2 per cent below foe 
preceding six months and un- 
changed compared with the 
corresponding period of 1966. 


BBC creates central 
policy and planning unit 


BY RAYMOND SNODDY 

THE BBC yesterday announced 
foe creation of -a central policy 
and planning unit to be headed 
by Ms. Patricia Hodgson, who 
has been secretary of the cor- 
poration since 1985.. 

Mr Michael Gheckland, foe 
BBC director-general, said the 
appointment completed foe re- 
structuring of senior BBC man- 
agement 

The new unit would bring to- 
gether audience, market and 


economic research, would ad- 
vise on matters of taste and 
decency and would “underpin 
the coordination of 1 editorial 
policy and practice across foe 
corporation.” 

Miss Margaret Douglas, chief 
assistant to the director-general 
since 1983, will become chief 
political adviser. 

The post of secretary of foe 
BBC will be advertised. 


Gencor 



General Mining Union Corporation Limited 

auopoiatt fa tfce BsfasbUc tf South Africa) 

Hagtatrstiflo No. tUKSiXBM 


Unaudited interim results for the six months to 30 Jnne 1987 


• Attributable income up by 31.6% to R303.8 million. 

• Interim dividend increased to 90 cents per ordinary share. 

• The contribution by Sappi 160% higher at R43.4 million. 

•. Industries’ contribution rose from R3.2 million to R32.7 million. 

• Further reduction in gearing ratio and financing costs. 


Dividends and interest payment 



1001887 

114.75 

90 

168.75 

259.1987 

289.1987 
15401867 

Dividends (cents per share) 










| Interest on 129% convertible debentures (c.p4J 




















Sectoral analysis according to activity 

Attributable fawame 

w 

36687 

Rd 

Six months ended 
80448 
% Rm 

% 

Year ended 

3 L 1296 

Rm % 

Mining 







Gold and uranium 

77J 

25.4 

745 

324 

1854 

279 

Platinum 

IAS 

34 

9.4 

4.1 

33.0 

86 

Coal 

134 

4J» 

224 

9.7 

454 

7.8 

Metals and minerals 

742 

24.4 

95.7 

4L4 

1614 

274 

Mining total 

1.759 

574 

2014 

874 

4054 

685 

Overseas ventures 

39 

L 2 

04) 

<a© 

(164) 

(27) 

-Sappi 

424 

144 

16.7 

74 

569 

9.6 

Industries 

32.7 

108 

34 

L4 

38.1 

64 

Finance 

594 

19.5 

46.8 

203 

1481 

259 

Services (net of corporate costs) 

3 3 

14 

(10.1) 

(4.4) 

(4-7) 

(0® 

Total 

8189 

105.0 

2574 

111.4 

627.1 

1080 

Unapportioned financing cost 

(150) 

(5.0) 

(26.4) 

(1L4) 

(35.4) 

(6® 

Attributable income 

3034 

1004 

2304 

100.0 

59L7 

1009 

Earnings per unit — cents 3114 


242.0 


636.0 


Dividends per ordinary 







share— cents 

90.0 


80.0 


230.0 


Number of capital units— million 

97.7 


954 


981 


Permanent capital holders’ 

30447 

304.88 

3142.88 

interest at vslwitien 

Bm 

% 

Rm 

% 

Sm 

% 

Mining 

Gold and uranium 

3444.7 

404 

29639 

364 

3,4679 

414 

Platinum 

14324 

144 

9864 

17.4 

1,4103 

167 

Goal 

2414 

2.7 

324.7 

5l7 

2909 

34 

Metals and minerals 

8474 

9 A 

842.1 

144 

8404 

100 

Mining total 

54954 

684 

4417-0 

744 

64184 

71.4 

Overseas ventures 

1044 

14 

83-5 

14 

885 

LO 

-Sappi 

14164 

134 

546.1 

9.6 

8799 

104 

Industries 

1,4644 

164 

8244 

164 

14324 

14.6 

Finance 

310.7 

34 

185.4 

34 

3227 

88 

Services and corporate assets 

156.4 

L7 

' 1264 

24 . 

1554 

L9 

Total 

94484 

102.7 

6,0924 

1074 

8.6924 

1034 

Unapportioned loans 

(2404) 

CM) 

(415.0) 

a® 

(2724) 

(34) 

Permanent capital holders* 







interest at valuation 

84074 

1004 

hjSFIJd 

1004 

8,4199 

mo 

Value per capital unit— cents 

94» 


5458 


8618 


Number of capital units— million 

97.7 


954 


. 97.7 



Noies to the incame statement and balance sheet 


L Extraordinary Items . 

Net losses an changes in interests in group companies and discontinuation of 
activities as well as foe group's interest in net extraordinary items of associated 
companies 0986 year— also provision against overseas ventures). 

& Value par capital — *t 

nils is calculated on foe basis of the capital holders* in t erest in the company with all 
investments, inphwUng those in rnf* w ri rtinr ' ftC i valued at market value. 

3l Foreign h«mh% 

All material foreign liabiliti es are contractually covered against exchang e rate 
fluctuations. 

f 

Additional Information 

L Interim dividend . _ 

The interim dividend of 90 cents per ordinary share is 129% higher than foe 80 cents 
per ordinary share for the six months to 30 Jnne 19681 The distribution for foe six 
months is 3.1 times covered (1888: 28 times). 

2. Slgnfflrant c h a nges after 39 Jane 1887 


Income statement Percentage 

Six months ended change Year ended 

38687 30.6.86 June on 3L1296 



Bm 

Rm 

June 

Rm 

Dividend income 

1829 

1989 

(61) 

559.0 

Net operating income 

2754 

2188 

269 

3782 


4584 

417.7 


9374 

Financing costs 

7L4 

1381 

(47.® 

2319 

Income before taxation 

3869 

281.6 

37.4 

7064 

Taxation 

429 

45.6 


794 

Income after taxation 

3449 

2360 

481 

6264 

Attributable to outside 





shareholders 

787 

339 

1383 

123.7 

Consolidated income 

2662 

2027 

3L3 

502.5 

Equity accounted income 

404 

234 

72.0 

874 

Total Income 

3068 

2263 


5961 

Net transfer to/Cfrom) deferred 





taxation benefits reserve 

39 

(4-5) 


(1® 

Attributable income before 





extraordinary items 

3839 

2309 

319 

5917 

Extraordinary Items 

(44) 

(160) 


(254.® 

Net income 

2999 

2168 

- 

337.7 

Distribution in respect of 





permanent capital 

981 

89.3 

110 

2379 

Retained income 

2004 

1265 

585 

99.8 

Balance sheet 



Percentage 





change 



30.697 

30.698 

June on 

311296 


Rm 

Bm 

June 

Rm 

Capital employed 





Permanent capital holders’ 





interest 

29619 

29689 

109 

2,754.4 

Outside shareholders' interest 

1*1967 

14274 

169 

9881 

Group equity 

4,151.7 

39965 

129 

3,7409 

Longterm financing 

14634 

1927.0 

(394) 

1998.6 

Deferred taxation liabilities 

789 

979 


84.7 


63939 

5,721.4 


65239 

Employment of eapital 





Investments: 





Listed — Book Value 

1,4959 

1,184.4 


19434 

—Market Value j 

5,6729 | | 

49784 

39.1 

64288 


Unlisted-Book Value 

3349 


3444 


3287 


—Valuation | 

7861 


517.4 

519 I 

5583 ] 

Fixed assets 

24767 

2,9954 


68285 

Other non-current assets 

3928 

5269 


4466 

Current assets 

24129 

2,420.8 


2979.1 

Current, liabilities 

0,7134) 

0,746® 


(1,796.3) 



. 



bearing Joans 

(7465) ; 


(5264) 

j 

(599.2) 

P 

Creditors 

j. (9666^1 


09289) 

■J 

(1,197.1) 



59934 5,7214 5,523.8 


—It is anticipated that an announcement will be made shortly of a transaction in terms 
of which foe majority of the re mainin g industrial Interests will be transferred to 
Malcor/Malbak. 

—A rights issue of R7L0 million by Darling & Hodgson was underwritten by Gencor. 
Gencor*s share in this issue amounted to R4L6 millon, which was tended from 
available resources. 

—The effective interest in Senfrachem was increased from 9.6% to 12.8% at a cost of R&S 
million, which was tended from available resources. 

—A tights issue of R10L2 million by Sentrachem was partially underwritten fay Gencor. . 
Gen cot’s share in this issue amounted to R133 million, which was tended from 
available resources. 

3. Prospects for foe rest of foe year 

It is anticipated that foe earnings for foe second haif of the year will show a moderate 
improvement over that for foe first half of foe year. 

On behalf of foe board 

D. L. KEYS \ , 

J. H. FOUCHfi f Directors 


Registered office 
6 Hoilard Street 
Johannesburg 2001 

10 September 1987 


The Interim Report uriQ be moBeci fi> sharetokfera on or about 27 September 1987, after which dote copies vnB. be available at the Londonqffice, 

30 £2y Place, London EC1N 6UA 





10 


Financial Times Friday September 11 198 1 


UK NEWS 


Redland in £50m 
deal to make 
plasterboard 


BY ANDREW TAYLOR 

BPB INDUSTRIES’ virtual 
monopoly on the supply of 
plasterboard in the UK is set 
to be broken by Redland, the 
Surrey-based building materials 
group and CSR, an Australian 
building materials, sugar and 
resources group. 

Redland and CSR yesterday 
announced they had agreed to 
form a joint venture to supply 
the world plasterboard market. 

As a first step, the joint 
venture, Redland Plasterboard, 
plans to spend about £50m to 
£60m during the next three 
years on two British plaster- 
board producing plants. 

Redland will own 51 per cent 
of the new company and CSR 
wil lown the remaining 49 per 
cent 

Sir Colin Corness, Redland s 

chair man said that over the 

nest three to four years Red- the British market 
land Plasterboard would expect GSR said yesterday: “Given 
to invest £X0ffm in the UK and the difference in the size in 
on the Continent populations, plasterboard has a 

BPB Industries currently sup- much greater Share of the 
plies about 96 per cent of building materials market in 
British plasterboard. It is also Australia than in Britain. There 

is a great deal of potential for 
further growth of plasterboard 
in the UK and on the Conti- 
nent where plasterboard is 
used even less." 

BPB Industries said last 
night that it was not surprised 
by Rediand's announcement It 
had known for some time that 
Redland had been looking for 
a partner 


been becoming increasingly im- 
portant in the British building 
materials market 

It is widely used for partition 
walls in homes and is increas- 
ingly being used in commercial 
developments. 

Sales of plasterboard in 
Britain have risen by about 50 
per cent since 1980. Sales of 
plasterboard products currently 
stand at between £200m and 
£250m, according to Redland. 

Negotiations with CSR began 
after the Australian group 
earlier this year made an abor- 
tive bid fbr Rediand's majority 
stake in teenier, Rediand's Aus- 
tralian building material 
associate. 

CSR currently accounts for 
jiist over half the Australian 
plasterboard market, which 1 b 
roughly two-thirds the size of 


an important supplier in France 
and West Germany. 

The company’s share price 
fell by 39p to 354p on news 
of the joint venture. Rediand's 
share price slipped by 19p to 
500p. 

Plasterboard, a light and 
durable material whlcb is easy 
to work and bas good noise and 
heat insulation properties, has 


Midland arm co-ordinates 
US film company buy-out 


BY DAVID WALLER 

MIDLAND MONTAGU Ven- 
tures — the venture capital arm 
of Midland Bank — has co-ordin- 
ated the management buyout 
of tbe New York-based film 
company which produces the 
best-selling Jane Fonda Work- 
out' videos, in what it daims 
to be one of the first US buy- 
outs led from the UK. 

RVP Productions — to be 
known in future as Ugbtyear 
Entertainments — was bought 
from its former parent Bertels- 
mann, the German publishing 
group, tor an undisclosed sum. 
MMV paid $4.5m (£2.7m) for 
a 45 per cent stake but said 
this amount gave no indication 


of the total size of the trans- 
action. 

Turnover has not been 
revealed but MMV said RVP 
would have made pre-tax profits 
of between 92.5m attd $3m id 
its last financial year If it bad 
then been an independent 
Company. 

RVP. formerly a subsidiary 
of RCA, the US entertainment 
Company, was sold to Bertels- 
mann when RCA was acquired 
by General Electric last year. 

US backers of the bUy-Ottt 
included Citibank and Chase 
Manhattan Bank. This is 
MMVs first investment in the 
US. 


BA passengers rise l3% 

BY MICHAEL DONNE, AEROSPACE CORRESPONDENT 
BRITISH AIRWAYS’ traffic 


continued at high levels during 
August, with the total number 
of passengers rising by nearly 
13 per cent, compared with a 
year ago, to over 1.85m. 

The airline’s latest statistics 
show that this growth was 
evenly spread across UK and 
European traffic, together up 
13. 2 per cent to 2.33m, and 
long - haul intercontinental 
traffic, up 11.9 per cent to 
519.000. 

Cargo also improved substan- 
tially, with total cargo tonne- 
kUnmefenes flown gaining 15.9 


per cent to 138m. 

For the five months of the 
financial year to the end of 
August, BA's totfid passenger 
traffic rose by 16.4 per cent to 
over 8.62m, compared with the 
same period of ia&t year. UK- 
European traffic was up by 15 
per cent and intercontinental 
traffic up 20.7 per cent. 

If British Airtours, the 
charter subsidiary. Is also in- 
cluded, the total airline opera- 
tion involved over 10.5m 
passengers in the first five 
months, a rise of 17.2 per ce&t 
over the same period last year. 


Companies 
reminded 
of rules for 
takeovers 


By Cfey Harris 

THE TAKEOVER Panel yester- 
day reminded companies that, 
even if they were only conside- 
ring whether to launch bids, 
they were obliged to m ake ex- 
planatory announcements if 
their names emerged in market 
rumours. 

The panel said its move, 
which does not involve any 
change in the wording of the 
Takeover Code, was intended 
to avoid the creation of false 
markets, especially now that a 
greater number of private Indi- 
viduals owned shares. 

Tbe statement is the panel's 
lastest effort to assert its role 
at the centre of toe city’s self- 
regulatory structure. This struc- 
ture Ms met widespread criti- 
cism and some calls for a com- 
pletely statutory system in the 
wake of the Guineas bid for Dis- 
tillers and Insider trading 
cases. 

The panel once again empha- 
sised that companies in any 
doubt about their position 
under the code should consult 
the panel directly and not rely 
on the word of their adVi&exs. 

Nevertheless, tbe panel made 
several general points for 
guidance: 

• When a company’s name was 
mentioned in rumours as a 
possible bidder, “it should nor- 
mally be presumed that there 
has been inadequate security on 
its part** 

• Announcement of a hid 
should hot be delayed simply 
became financing plans had not 
been completed, 

• Tactical considerations should 
not influence the decision 
whether an announcement is 
necessary. 

• Although a change of 10 per 
cent or more in a potential 
target company's share priced- 
unexplained by the general 
market or publicly known facts 
— was considered “untoward” 
under the code, the absence of 
such price movement did not 
justify a would-be bidder's 
failure to make an announce- 
ment if other factors were in 
place. 

• If a company was revealed 
as having ^ bought shares In 
another am made no statement 
about to intentions, the market 
Was “entitled to infer*’ that it 
aid not plan to make a fun bid. 

The head erf corporate finance 

at one merchant bank said yes. 
texday that the state m en t would 
bear further study, but be en- 
visaged potential problems in 
arranging underwriting if com- 
panies ■ were toned to make 
premature announcements. 

Mr John Walke r-Howarth, the 
panel’s director general) said 
yesterday that no recent case 
had prompted the statement 

A report prepared for broad- 
cast last night on Thames 
Television’s The City Pro- 
gramme suggests that insider 
trading my Still be rife ih the 
City in spite of the additional 
publicity given to enforcement 
in the past year. 

After a study of 96 com- 
panies facing bids or mergers 
since November 1988, it said 
the share prices of 70 had in- 
creased In the preceding weeks 
by four times the average rise 
in the FT ALL Share index 
over the same periods. 


David Lascelles on Sir John Cuckney’s appointment to a development capital business 

Captain of industry takes the helm at 3i 


FEW PEOPLE qualify more 
readily for the title of captain 
of industry than Sir John 
Cuckney. Although millions of 
people came to know his tall 
figure and craggy features 
during last year’s stormy West- 
land affair, his career has en- 
compassed the City and the 
chairmanship of organisations 
almost too numerous to men- 
tion: the Crown Agents, the 
Port of London Authority, 
Thomas Cook, Brooke Bond, 
John Brown and Royal 
Insurance. 

Now he Ms added to that 
the chairmanship of 31, the 
UK’s largest development capi- 
tal business which is owned 
jointly by the large clearing 
banks and the Bank of England. 
He was suggested for the Job 
by Mr Robin Lelgh-P&nborton, 
Governor of the Bank. 

His appointment comes at a 
time when Si’s business is 
booming with the growth of the 
UK’S enterprise culture and a 
record number of new company 
start-Ups. But 3i itself may be 
about to undergo big changes 
including possible partial flota- 
tion oh the stock market 

He says that he had always 
thought of SI as M a valuable, 
constructive and rather unique 
financial institution.* 1 But he 
had never appreciated, even 
when he became a non- 
executive director of the Mid- 
land Bank) what an asset it was 
for its owners. Under its chief 
executive, Mr Jon Foulds, it 


has achieved a compound 
growth of 23 per Cent a year 
in net assets per share over the 
past five years without once 
calling on Its shareholders for 
new capitaL 

“It is refreshing to come to 
an organisation that 1 a doing 
well and is immensely busy,” 
said Sir Jobs yesterday in his 
office atop the 8i bunding in 
Waterloo, London, where be 
commands a fine view of the 
Thames and Westminster. “We 
could hardly have Wished tor a 
better climate in which to 
operate, with a Conservative 
administration and tbe enter- 
prise economy it Is trying to 
fester." 

His aim, he Says, Is to pre- 
serve 3i’s essential character as 
a provider of long-term finance, 
drawing on the group’s deep 
well of professional expertise 
and knowledge of industry. u It 
is the living counter to allega- _ t . 

turns of sort termistn,** he said, mle in helping small companies, 
referring to complaints that in- The group’s recent TV adver- 
vestors tend to Show little tiding fc&apaigfr-^its first— U 



Sir John Cockney: sees 31 m “a 
rathe* unique in stituti on ” 


loyalty to their companies. " The 
banks have demonstrated 
through 3i that they are able 
to take the long-term view of 
industry and its requirements.” 

3i provides finance a for 
periods of five years to how- 
ever long is needed in the form 
of either debt or equity capitaL 
The sums involved range from 
£50,000 to £40m. Although two- 
thirds of its deals are for less 
than £150,000, Sir John believes 
tbat 31 could play a still bigger 


part Of a new drive tor such 
business aftd Si is aide tb draw 
strong presence in the regions. 

Sir John also expects the 
group to become more active 
overseas, where it has offices ih 
the US, France. Germany, Ire- 
land and Australia, “We are 
dealing with companies which 
face global marketing prob- 
lems.” 

In commercial terms 3t 
occupies a slightly ambiguous 
position between hard-nosed 


realism »n d a sense of public 
duty bred of its Origins in the 
post-war reconstruction dayS- 

The fact that it is pftriuwned 
by the Bank of England also 
gives it a strang institutional 
character. 

Sir joha agrees that there is 
“a slight public service ethOS” 
but he Insists that the group is 
apfrlitfoai and applies that 
ethos in strictly commercial 
terms. It is not a provided of 
“ soft money”. 

The sheltering fiafid or the 
clearing hanks to another strong 
feature of the group. This adds 


to its establishment air and 
puts It in the cUriOtis position 
of competing with the banks’ 
own fast-growing development 
capital subsidiaries (though Sir 
John insists they also collabor- 
ate). On the other hand, the 
absence Of public shareholder 
pressure to keep rtlsiflg the 
dividend enables 3i tfl tokfe the 
longer-term view on Which it 
prides itself. ’ 

The banks, however, would 
like to be able to value their 
shareholding more fully in their 
accounts, and talks have been 
going on for some years now 
about a possible flotation. But 
to protect 3i*s character,. Mr 
Fouids’s ‘ management have 
insisted that a prior condition 
be the transformation of the 
group into an investment tnist. 
This status would prevent it 
from distributing capital profits; 
in Other words, it would not be 
Vulnerable to pressure to cash 
ih its chips in order to pay a 
higher dividend. 

Talks with the trtl&hfl 
Revenue are proceeding and if 
they succeed may produce a 
result in ft couple of months. 

Whatever happens, though, 
git John does not expect the 
banks Or the Bank of Enlahd 
to sell out completely; they 
would Only end uo owning a 
smaller part of the business 
with the rest in the open 
market “It is extremely 
important* 1 says Sir John, 
“that the Bonk of England 
should remain a shareholder.” 


Some Scots Tories say ‘Thatcher a liability* 


BY JAMES BUXTON, SCOTTISH CORRESPONDENT 

lish ” ministers. 


HRS THATCHER is Seen by 
some Scottish Tories as an elec- 
toral liability and her visits to 
Scotland may be counter- 
productive, according to an in- 
ternal Scottish Conservative 
Party document 
The leaked document says 
that Mrs Thatcher was “charac- 
terised by some as a liability 
in Scotland, mostly, one „ 

gathers, because of her English- 

nan anl rowaraml * ITT! Paring * qUeSliOtinaifBS I 


“ One hesitates to suggest 
they should spend more time 
in Scotland or contemplating 
Scottish matters, as this could 
be counter-productive — a 
conundrum indeed.” 

The document; which was 
never intended for publication, 
is based on responses from 
workers to 
sent by tbe 


“■JJJ » pCTWSived Scottish Conservative' and 

2 It adds: “It seems that the 
more she strives to be accept* *“7 wtog o£ party - 

able in Scotland, to be In- It followed the Tories’ loss 

terested in Scotland, the more Of li Of their 21 Scottish seats her opposition to the idea of 
She is seen as condescending in last JUfle’s general election, a Scottish assembly, but the 
and patronising. This also Hr John MacKay, recently leaked document suggests that 
tends to apply to other “Eng- appointed chief executive of Mrs Thatcher and non-Scottish 


the Scottish Conservative Party, 
yesterday stressed that the re- 
port was a discussion document 
based in the views of people 
who, in many cases, were hot 
going to vote Conservative. It 
is to be discussed by the 
executive of the Conservative 
Association on Sunday. 

Deep embarr a s sme nt has hftefa 
caused by the fact that the 
paper emerged less than a week 
after Mrs Thatcher made a visit 
to Scotland, which many Con- 
servatives regarded as more 
successful than past visits. 

The Prime Minister reiterated 


ministers “should hot 
decided positions” on issues 
&& dbvttiutioh. 

•: “They should make it plain 
they are prepared to Ksten,” the 
report Says. It ftfgtte* to* the 
CtttservfctftO Patty* be* fag the 
only party opposed te devolu- 
tion, adds to the impression 
that R is “English dad ftflti- 
Scottish.” 

The report gays that the 
cwflffitmlty charge lost the party 
Votes Ih Scotland, though not 
fteOisBSaflSily because it Was 
wrong- since tt was approved 
By parliament Shortly before 
the MefttieU it Was fiht possible 
to eXplMfi it adequately Ih the 
time ftveua fife 


Liberals’ commitment to incomes policy questioned 

BY JOHN HUNT, . w .. ... . ^ 

THE POSSIBILITY 

merged Liberal and _ . . . „ 

Democratic Party abtmtionlng terpreting it ax a move by Mr 
its commitment to an anti-iBCa- Beith to strengthen his positroh 
tionary incomes policy is raised for any future leadership Cfttt- 
in a report by Mr Alan Beith, test in the merged party 


dftpUly leader of the Liberal 
Party and chairman of tbe 
party's policy committee; 

The move Would be a signifi- 
cant departure from Liberal 
policies of recent years. If it 


of a place in the policy committee, possible Of -pitid ant -'in ft :feV GoetaT LtefnQcrflts 

Social Some at Westminster were in- years’ time. under the tifew SDP leader, Mr 

IflfttefWe It Waft not possible Robert Maclenhfin, . 
to say “whether anti-inflationhiy He atop said that there would 
incomes policy machinery Will have to be much new thinking 
be heeded to allow such ft on toe party’s defence policy 
The report IS put ferwftra SB AMfe iy to bb pursued .” If ah which, in toe etoatoto, coin- 


debate at neat week's Liberal 
Party assembly at Harrogate. It 
will be available to delegates 
and thus gives Mr Beith an 


was adopted it would mean the opportunity to put across filS 
dropping of the commitment in own political philosophy to 
toe SDP-Liberal Alliance gen- them. 

er«l election manifesto for Hr Beith says that in toe last 
reserve powers to introduce a election toe Alliance was able to 
coontertofiation tax. Put forward Coherent plans to 


contribution te toe merger ifleOfitefe policy codld not unlbck mitted U to toahttafii aftd 

modernise a BrfhimuBi huciear 
deterrent until it can be nego- 
tiated away. 

The arnfafierger Social Demo- 
crats, unoet Dr David Owed, toft 
SDP leader, suffered another 
setback yesterday when pro- 

UMl 


toe door to beneficial measures 
there would be no point to 
embarking upon it* 

“We need to ensure that wfe 
have a viable mechanism to 
advocate,” he said. “But it 
wotild be quite Wrong to com- 
mit ourselves now to an incomes 
policy to the 1990s to order to 
sustain an economic strategy 


Canon puts 
new copier 
on market 


By Terry Dodsworth, 

Industrial Editor 

A COLOUR copying machine at 
half too price of many sys tems 
was launched In toe UK yes- 
terday by Canon, the Japanese 
Camera and office equipment 
group. 

Gabon said it aimed to open 
tip ft broader market for colour 
reproduction* Until now. colour 
COpiftrs have been sold largely 
to Specialised companies willing 


Ajjsoci^i- 

the new chairman of toe 


Thft oroposal reflects Mr stimulate tbe economy which winch may by then be mappro- aSMClfitiofi* Dr Lihfftey Oran- 

priate,” ahftW) said it WaS ah OVerWhelfn- 

Appareatiy told view would tog emiatt*!inWit of toft inoVe 
flftfl favour with the pro-merger towards merger. 


Berth's own view but arises out 
of discussions that have taken 


were carefully costed; Bat it was 
not posable to predict whether 
such a stimulus would be 


Lautro likely to maintain a low profile 


BY NICK BUNKER, INSURANCE CORRESPONDENT 


IN THE 1988-88 financial year, 
Lautro expects to be spending 
f2&n a year on regulating 
about 400 members — which will 
include friendly societies as 
well as life companies and unit 
trust managers* 

That will make its budget 
consid erabl y smaller than those 
of toe UK's other financial Self 
Regulatory Organisations 
(Fimbra, for Instance, the 
equivalent body for investment 
intermediaries, plans to spend 
about £8.3m to 1988). 

Judging from toe 41-page 
policy statement which it pub- 
lished yesterday along with Its 
proposed rule book, Lautro will 
be a relatively low-profile, un- 
obtrusive SRO. 

For instance, its enforcement 
staff will make scheduled in- 
spections of its members’ cen- 


Tbe Lire Assannee sad 
Unit Trust Regulatory Organi- 
sation yesterday published its 
long-awaited draft rule book, 
writes Nick Banker. . 

Before Lautro can be recog- 
nised as the watchdog body 
for Britain’s life assurance 
and unit trust groups, its 
rules must be approved by toft 
Securities and Investments 
Board. Tbey must also be ex- 
amined by the Office hi Fair 
Trading, Which will want to 


emne that uey ara aot anti 
competitive. 

The SIR— which received 
advance copies of the rale 
book' last week— hopes that 
both these processes can be 
concluded by early December. 
Lautro will then be officially 
confirmed as one of the self- 
fegttifttory organisations set 
up under tthe 1986 Financial 
Services Act to police tbe 
savings and investment in- 
dustry. 


by its chief enforcement officer. 

At present, Lautro employs 
only 12 staff, with offices at 
Centre Boiht, London, It also 
has .six committees, covering 


compliance. 

Lftutro plank to augment its 
staff by crekfihg “a regional 
monitoring investigatory capa- 
bility,” and by adding staff to 
investigate complaints. 

It will create two committees 
to cover monitoring of mem- 
bers, and disciplinary proceed- 
ings against those who break 
the roles. Sanctions against 
wrong-doers will range from 
private reprimand to termina- 
tion of membership. Also, 
Lautro will appoint ah appeals 
tribunal to review decisions 
made by toe disciplinary 
committee. 

However, it hopes to use the 
PTrirftihg Insurance Ombudsman 
Bureau to investigate com- 
plktots by toft public against 
Lautro members. Lautro said 


conform to Lautro’s rules. 

But Lautro will give one 
month’s notice of these visits— 
and will not adopt Fimbra’s 
policy of making random spot 

checks. . 

tral and branch offices, to make Lautro says it will only make membership, comim&Siofcts, sell- the LOB had agreed to do this 
sure tbat their administrative “ nonotice visits ** to pursuit of ing practices) product dis- in cases where the Lautro 
functions and sales practices “ specific inquiries’* initiated closure, advertising and members wete life offices. 

Code of conduct to control Rules ora commission will 
company representatives help investor protection 


BY ERIC SHORT 


BY ERIC SHORT 


THE CENTRAL pillar of 
Lautro’s investor protection role 
will he the operation of a code 
of conduct that applies to mem- 
ber companies and tbe company 
representatives of the members. 

Tbe basic aims of the code 
will be to implement set objec- 
tives: 

B Maintaining high standards 
of integrity and fair dealing. 

• Exercising due skill, care and 
diligence to providing any set * 


ensure the investor knows when 
he is dealing with a company 
representative afid that he can 
sell only the products of his 
company. 

The code not only deals with 
telephone contacts and face-to- 
face interviews but Bets out de- 
tailed requirements for infor- 
mation to De shown on business 
cards and stationery. 

On the subject of marketing _ --- 

, irr contracts, toe code contains de- by remuneration considerations 

diligence _ in providing «F seo tailed rules on “best advifie** in — that is selling & particular 

vices in the course of business, the form of a tuou-stoOi and product promoting a certain 

~ thou-shaU-not basis. These life company because it pays 

tend to be stronger than the higher ctnnmlgslon. 


ALTHOUGH THE code of con- 
duct lays down firm principles 
on bow intermediaries should 
deal with cheats, Lautro, follow- 
ing toe SIB rules, is reinforcing 
investor protection by laying 
down rules on commission pay- 
ments to independent inter- 
mediaries and product disclosure 
requirements in all sales. 

The aim is to ensure that 
recomendatione are not 


• Generally taking proper 
account of tbe interests of in- 
vestors. 

The SIB roles laid down the 
principle of polarisation with 
regard to marketing life assur- 
ance and unit trusts — that the 
intermediary must either be 
completely independent or else 
represent just one company. 

Lautro is responsible for 
monitoring company represen- 
tatives and has taken care to 


ctoure, unles toe member com- 
pany is bound by am industry- 
wide nmcniim commission 
agreement, known as soft dis- 
closure. 

Lautro has firmed up this 
industry-wide commission 

agreement. The central theme is 
limiting this Initial payment. 
General practice in commission 
payments is to make high initial 
and very low renewal payments. 

Although the agreed scale 
keeps the same format, it 
spreads toe initial payment over 
much longer periods. 


„ stronger than the 
corresponding SIB rules. 

The company representative 
is required, as far as is practical 
to ascertain all relevant details 
from the investor before making 
any recommendations. 

He then has to give the in- 
vestor all relevant Information 
concerning recommendations To 
meet the investor's require- 
ments. 


Lautro has also ensured that 

JIB Itself bans OVenfder com- co mmis sion payments cannot be 
mission p&y&eats-^higher pay- circumvented by indirect bene- 
ments to salesmen for volume fits. Entertainment is allowed 
business — a potential source of but most not be excessive, while 
hiss. promotional gifts are limited 

SIB also attacks the problem to £25 In a calendar year, 
of commission bias by requiring Restrictions on indirect bene- 
all independent life and unit fits go much further. Members 


trust salesmen to disclose com- 
mission to investors at the point 
of sale, known as harsh dis- 


cannot supply software to inter- 
mediaries except At full COffi- 
zflerciM cost 


Stricter council tenders urged 


BY RICHARD EVANS 

THE CHALLENGE presented 
by toe Government’s contro- 
versial legislation on compul- 
sory competitive tendering 
Would force local authorities to 
adept ffitiefi stricter monitoring 
standards, Mr Howard Davies, 
Controller of the Ahdit 
Commission, said yesterday. 

His theme, it a National 
Consumer Gountll eoHfSfeddft 
in London on standards of 
service in local government and 
toe health service, was tost 
performance measurement 
would be a key tool for local 
authorities over the next five 
years. This would be toe case 
whether they supported or 
opposed toe legislation. 

“It will be important fdr 
those authorities who wish to 
defend their right to deliver 
services themselves to demon- 


strate that they are doing sd 
effectively . . . and those w fad 
aim to privatise will need td 
do so within ft Clearer defer- 


and 


pertoftfifthCft to a clear 

coherent manner, and one which 

allows them to set management 

— — » — wu» u«iu- objectives Which bring their 

itibfl Of toe performance levels Organisations up to acceptable 
they . are endeavouring td levels,’* he Skid, 
sustain,” he raid. 


Mr DaVieg accepted that 
authorities of different political 
complexions would respond M 
different ways. 

“Some authorities will Wish 
to try to retain as much wferk 
as possible ia-Jzouse, and as 
long as tbey meet toe conditions 
set in toe legislation it is hot 
unreasonable for them to take 
this llhft* But it will inevitably 
mean a major revolution in 
direct labour organisations. 

“They Will not be able td 
achieve this revolution unless 
tbey ftre prepared to move 
quickly td the monitoring of 


There are others who would 
Sftft do virtue in local authority 
employment for its own sake 
and who would prefer to get a 
suitable level of service at the 
best price. Mr Davies said that 
success in this “Marks ftftfi 
Spencer ” approach to local 
government could not be 
achieved by Bftifig vftgUfe about 
what was Wanted frdm their 
suppliers. 

" If local authorities wish to 
§■* the best out of contractors, 
theft that is thb kind of skill 
they Will need to employ, in 
many cases they do not have 
such skills at present, ” he raid. 


Steel output up 
21 per cent so 
far this year 

By Nick Canwtt 

STEEL OUTPUT ill toft UK fftis 
year has been running 21 per 
cent above last year, according 
to figures published today by 
the steel industry- 

production in toe first eight 

months of 1987 averaged 321 
tonnes ft Week compered wife 
266 tOfiftftS duriftg toft Mme 
period last yew* 

Provisional figures show t&ftt 
total UK Steel output was 11.2m 
tonnes to the eight months to 
August as against 9.3m tonnes 
for toe same period in 2986. 

Some of the increase is toe 
result of a distortion Is supply 
caused by the reHning of British 
Steel Corporation's Redcftr blast- 
furnace 1 last year which 
depressed 1986 production. 

ft also reflects increasing 
demand ill the UK add abroad 
for .steel made In toft UK, 
reinforcing the position of BSC 
which Is complaining about the 
restraints placed upon it by EC 
production quotas. 


to nay up to £46.000. 

The Cdfloh machine, priced at 
£17,000 Hi the tJK, is much 
S iMl leC than the preceding 
generation of colour copiers, 
with dimensions rOtighfr in 
with Conventional black-and- 
white teachings. 

Canon raid the copter could 
aKo be used without tbe need 
for Specialist maintenance staff 
~ ehe of toe drawbacks of toe 
Original col&Ur Copiers — and 
thftt ft high quality of repreduc- 
tlofl MS befth achieved through 
the use of lakers. 

The company hopes that mar- 
kets for the machine, called the 
C&lOiir Lftser Copier, Will in- 
clude the lafge taUltmatiOnals, 
banks, design studios, advertis- 
ing agencies and architects. 

Caflofl said fesftfttoh indica- 
ted a strong pentmp demand 
for colour copiere. The machine 
was introduced in Japan seven 
88165 have risen 
to 1,200 units, well above the 
company’s expectations. 

Market research iA both BH- 

Si iui A “ erica ha * confirmed 
that fuU colour copying is seen 

3? 6 - , of to® k®? . areas of copier 

feS TOwfl. *• 

Scots solicitors 
set up financial 
Services group 

fi7 harry hltey F 

*85255 SOLICITORS have 
«taWhffi e a ad investment ihter- 
company as a response 
SL55 *«<l*tii-emeAtB of file 
FiAftncial Services Aet» 

JjSr 5ss“jsra 
SK. 01 tte “■ ***** 

with in association 

IS? £? dgwick Personal Finan- 
part of the 
JJSSJS*® 86 ^. Sedgwick Group, 
ahd Admin- 
facilities in exchange 
cotainissiohs. The 
arrangement is designed to 
SntirtS solicitors to 

CWS into forte ^. act 


Midlands Metro plan lann^ ^a 


BY LYNTON McLAIN 

THE "WEST Midlands Passen- 
ger Transport Authority yes- 
terday launched plans for 
Midlands Metre rail project, 
to be operational by 1992. 

The cost of the metro Was 
put by the authority at £800m 
over the next so years, with 
£200m expected to be spent on 
the initial outl&y. 


-- About ball the mohey could The 
t come &om the Europe** com- *5^?^ nas Proposed a 

ft mattlty’ft yegionil development «dlftfteg from 


fund, with the balance from 
government grants add toe 
private sector, the authority 
said. 

. ‘Trafalgar House is consider- 
ing taking an equity stake in 
the metro. 


** tSoVi toe 
neighbouring Black Ctountrir. 

,?^ he authority wants an en- 
abling parliamentary bill tn bp 
jotroduced it, JiiS^o tha?^ 

SS i ftSS route cin «* star - 


Welsh expansion schemes announced 


BY ANTHONY MORETON, WELSH CORRESPONDENT 

Association is to expand its in- 

£or^orto”W>ig brin^hTtoft wSS^ho^d^dd afemt^Mro 

itowoAferce..anda»announc® 


TWO MORE plant expansion 
schemes have been announced 


ha&d- 


Jobn Hlfie to produce 
made model cottages. 

paUty to aintost 1^00 this week. UtaTSTS 

Hygicaro, * Wrexham work- of th£ mK a S ran GOmiSSn 

^ obs being created in the high sUita e Week. bolter 

other 150 machinists and G* G. technology sector in 

Hahn is J® open a fectoi* at These ^nnoitecftmttita^onow ceSfSL*! 3 WeBt German ton- 
Mold nearb y » Produce sfthl- closely the annoufiCetaerS cS »Pened a rates Office 

User systems for toe food mdus- Wednesday of 30 new jobs at h. ***» V* four years ago and 
tty, the first time they have Aberttare by fS’ 3S«r ftlfi to be^ £reduc- 

bren made m the UK. Office furniture concern and a hf D 4, T*L e office will also 

In addition the Automobile smaller number in Wrexham by SteX° Vefl *° notih w «l«6 



11 


Financial Times Eriday September 11 1987 


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UK NEWS - THE TUC AT BLACKPOOL 


Unions divided but drawing closer 


5&t.v 

tv"*:'! lit'? 

8 «kk& 

* 4^-3 2j 
^ £$S 


: ***:»£•;* 

an 


The TUG doses today m 
Blackpool with Britain's onions 
divided over future, strategy 
but drawing together on the 
need to find If possible. some 
way of restoring their role end 
influence* fhflip Bassett Writes. 

Senior tut: leaders will next 
week begin wodt ofi deciding 
on first the members ena then 
the prograjume of work for a 
special retfewjwrtjy m aniwi 
organisation, Which Ifi expected 
to be headed by MS- Clive 
Jenkins, general secretary of 
the white-collar 'AflTMS, who 
will today be elected TOC presi- 
dent for the taming yet&. 

Yesterdays congress debates 
saw further sharp divisions over 
both civil nuclear power and 
nuclear weapons, reflecting the 
diverse models of unionism 
being offered on the one hand 
by tiie militant National Union 
of Uineworken and on the 
other by the more conciliatory 
EETFU electricians and AEU 
engineering workers. 

But union leaders bf&srflJy 
agree erf the heed lor the review 
-*4he principal outcome Of- the 
congress WeCk— to try to fiM 
solutions to the problems facing 
Britain's unions of falling union 
membership 4t a tune. ftfrflsfiig 
employment ahd according!?, 
continuing mia Ih the propor- 
tion of the Workforce who Me 
union metab<l?s. 

The review will cover a 
number of areas, terfudifat the 
.controversial issue Of strike-free 
sinle-dfiioh deals end the feffer- 
ihg attitudes w. nftiods towards 
them. 

Moat uflioh leaders as they 
left Blackpool yesterday itemed 


Reports by 
PhiKp Bassett, 

Dartl Bnndtej 
Chstfifes Leadbfcater, 
Jimmy Burns 
and John Gapped 
Pictures; Alan Harper 

c on vtnrod that some kind of 
formula emud. be found by the 
review to te&Olva the ptoblem— 
though equally, few were able 
at thk stage to mate concrete 
su*kvstit>&* about what that 
rfofthtt* might be. 

‘ t£ the tteUe Si resolved— and 
WC leaders are insistent that 
ft win have to be— then the 
review will move on to wider 
Issues, foremost amen them 
will be how best to deal with 
growing no&^nionism. 

. it will Also encompass the 
wav* and organisation of the 
TUC itself, and Wifi take oh 
board -toe idea* pr&po&ed by the 
I aSS* tor staffs* union ami 
approved b? thb congress yes- 
terday, of sotting dp ah inde- 
pendent research body to 
promote ftfeW thinking for the 
trade unions. 

• The TUC is to consider 
sattiag - up » MaeueBBe&t, 
policy thinR-ta»k. to sttmuhite 
wsdaruging debate around 
innovative left of ce&too 
policies. - 

The think tank's role Would 
be mbaeuod m that of. toe 
group of independent think- 



W", 



\W 


Arthur gCalgiti: uo In challenger to 
the policy fcf the leadership 


tanks, including the Institute 
of Econfataic Affairs* and the 
Adam Smith Institute! Which 
had a significant influence On 
Conservative thihkihg in the 
late 39706 end e»wy 1980s. 

Delegates overwhelmingly 
supported a motion from the 
ntSF which urged the general 
council to consult with unions, 
political parties, academia 
institutions, and ehatitias. with 
toe dim of establishing 0 thtoft 
tank within id months. 

However it seems unlike*? 
toot the TUC will move that 
quickly to take up the idea. Mn 
Rodney Bicfctttttlfe, the ehalbj 


man of the TUG'S economic 
committee, cautioned , than 
given the need to raise finance, 
■recruit staff, aha find premises 
it was unrealistic to hope such 
a centre could be set up within 
a year. 

Mr cave Btooft, of the IRSF. 
warned delegates that to be 
effective the research centre 
would have to produce ideas 
Which would not necessarily be 
acep table to the unions. He 
noted that the labour Patty’s 
election campaign bad been 
hampered by a lack trf detailed 
research on a variety Of hones 
{including t&fcatioh. 


Nuclear balancing act survives challenges 


THE TUCe support for uni- 
lateral nuclear disarmament and 
its delicate b&iaftti&g act on 
nndeft? power Survived strong 
challenges from .right and left . 


A moVe by too AEU engin- 
eers and EETPU eleOfirliaass to 
call tor a referendum on 
nuclear disarmament received 
barely any becking when the 
two uniOfis forced & Vbtfe agfiifi&t 
the wishes fetid pleft£ Of toe 
TtfC tofedfer§htp. 

Similarly, delegated Voted by 
a substantial majority to favour 
of a further year's review or 
nudear newer, rejecting a can 
by toe Ntrk miners and tbu 


- firefighters »%.' sgato ' fegaihst 
leoderehlp pleas to adopt &n 
dntimaciear st&nfcfe ... 


The miete disarmameht 
aebare was the Juflrt 
of feaweefc ite »»y SaefttoB, 
general secrel^y of m Asia 
tram driver*, was given & 
standing ovation tor mat wu 
his lari Congress speech before 
m retirement hast aefttk Mr 
BdfiRtnfl, Advocating bdntinued 
support tot limlatoridte urge# 
the AEU in the Interest of 
unity not to press the refer- 

febgtuh, 

XT SHI JMlBhi ABU presi- 
ittiurea w» comply, To 
loud heckling, he said Cat 
nudes? weapons had ksept the 
peace to Europe stoefe l#4S and 
that uafintei^an . was like 
“offering the Russians a no- 
strike deal before we Obtain the 
beneflfts.” 


Mr dofttea raid a gbrenment 
hod ho rtg&l to take the utmleaf' 
aetereefttaway without the pe^ 
mitoum of the BHtuh people. 

Mr Ken Gdi* geuered eecre^ 
fefcur of Tato, tile manufacturing 
uniem, re^ed that to abandon 
wtilktoreiMB would be “po»- 
tifcal euicide H to the present 
intenriloMi dsmate. The 
USSR disazmament offers pre- 
sented “a woftdcfittl, thrilling 
prospect ” for the worn. 

Gftngrets Voted tor Tatt^S #e- 
iMxm&tk)Q of TUG support tor 
“British flbetett aisfetmamoht 
as a stMifiefe&t e&nmuntidn to 
world pfeaa*. bHtish security 
fefid the reritfellriitiea Of tffe 
British economy.** 

£&rtifef , CangWsS had hooded 


an appeal fay Mr Norman WlifiG, 
TUG general secretary, to allow 
another 18 mehtha tot the 
TUCs nuclear energy review 
and not to “jump the gun whdn 
there are important htarflles 
10ft to jump. 1 * 

Mr Arthur ScargUk NUM 
president, said Cdhgress hfed 
been assured last year that the 
review would take only 12 
months. “Once again we are 
being asked by too (TUG) 
general fcoiuttU to delay, to 
procrastinate an an issue of 
Vital importance to m&&idb<L M 

With 40.006 trade umon&ts 
tt ton hUclefer power 

the Nun’s reiiiire ts push 
mreugb tie toil for pheamg out 
oi nuclear plants averts a 
gertotlB tiMh. 


Department 
planned for 
women and 
equal rights 

THE TUC voted yesterday to 
establish an equal rights depart- 
ment to promote the interests 
of groups In society and ih 
uniohs sUth as women and the 
ethnic minorities. 

Technically, the Congress 
voted, also by a substantial 
majority, as well to set up a 

women’s department but Mr 

Norman Willis, TtiC general 
secretaxy> made it dear that in 
accepting the resolution on the 
women’s department from the 
health union Cobse, the 
women's section would be an 
Integral part erf the overall 
equal rights department. 

He called it a "very Import- 
ant mbve forward'* for the TUG, 
part of its determination to 
work at the task Of organising, 
i&votvthg And building services 
for women within unions. 

Ms Rose Lambiet from Cobse. 
said that though one-third of 
trade unionists were women, 
the unions had failed to 
achieve participation of women 
members. 

Though C&hse accepted ah 
fcfnfetitUneht from the NUT 
teachers* union that the 
proposed women’s department 
Should tlot b6 staffed solely by 
Wotoeh, Mrs Lambie stressed 
that suth a department would 
have to feature a substantial 
women's involvement. 

Pointing but that all seven 
beads of TUG departments Were 
meni she said there should be 
u ne attempt to exclude women 
from the male corridors of the 
TUC*" 

Mrs Dawn Cassell, from the 
CFSA civil . servants, said the 
TUC General Council s patronis- 
ing attitude to women was 
“backward, condescending and 
outdated." 

Arguing for toe recruitment 
to muons of women, Ms Lynn 
Lloyd, Of the film tobbhidans' 
ActT, said: ** WoffleB nfidd a 
treao union to fight tor them 
fehd you need memhets. you 
M efl Subscriptions. Whfet wfes 
once & morfei ntteSsity is how 
a finahrtal btetosity.** 

Mr tton Gill, who chairs the 
equal tights committee, 
sold that women would join 
trade unions if they, had t a 
chance to become a force in 
the unions they join. 


Building unions shift stance 
to accept self-employment 


CONSTRUCTION UNIONS ?e* 
terday acknowledged publicly 
that they had to accept the rise 
of self-employment among 
workers in the industry and 
change their policies to accom- 
modate it 

Xt was the first time that the 
leaders unions traditionally 
opposed to any sanctioning of 
self-employment had spoken out 
together so strongly in favour 
of a change in attitude. 

Congress backed a com posite 
motion from the EETPU elec- 
trtuanfi’ and Ucatt construction 
workers' unions recognising 
that “ modem industry requires 
new working patterns which a 
changing society is more pre- 
pared to accept” 


The motion was proposed by 
Mr Albert Williams, Ucatt 
general secretary, who pointed 
out that the majority of con- 
struction Workers were now 
self-employed, despite the 
opposition Of unions to the 
development. 

He said that unions aid not 
chaOse which way labour was 
recruited, and attacks by the 
Government of local authority 
direct labour organisations were 
threatening even public sector 
control of construction employ- 
ment methods. 

He was hacked by Mr Paul 
Gallagher. EETFU president, 
who said that unions would 
simply be making “ futile 
gestures * if they refused to 


recognise the growth of self- 
employment. “ For us, there is 
no choice. We are going 

forward,” he said. 

There Was opposition to the 
motion from Mr Brian Williams, 
a national officer of the manu- 
facturing union Tass, who said 
that the ttifemployed were 
“budding entrepreneurs " who 
were “utterly opposed to the 
principles of the trade union 
movement” 

The motion was passed with 
opposition only from Tass after 
Mr Williams replied that 
workers who were self-employed 
for tax purposes had been found 
in industrial tribunals to be 
effectively directly employed. 


Working to be your own boss 


THERE have been fewer more 
rapid and far-reaching changes 
in a sector of the labour market 
than that which bas occurred 
over the past decade in the con- 
struction industry. The relent- 
less growth of self -employment 
has left both unions and 
employers’ federations struggl- 
ing to adjust 

Yesterday’s vote in congress 
was a significant move towards 
a fresh policy of responding 
to the development rather than 
trying to ignore it behind 
declarations tit total opposition. 
Unions have previously baulked 
at admitting so cidariy that they 
cfeh&ot turn back toe tide. 

Inland Revenue estimates 
bttw put toe number bf 
hdnrttuctibn Woffeets who are 
selt-em^ioyed at about boo, boo, 
compared to some 500,oOo 
directly employed. The total 
registered as sAtf-employed fids 
doubled since toe “7l4 tax 
form” system was set up in 

1075. 

The attraction of self-efeploy- 
ment for both the construction 
Worker and employer is plain: 
a ?14 tax form- enables the 
worker to charge expenses 
against eareings, aha means 
that the employer does not 
fifeve to pay a National Insur- 
ance contribution, or holiday 
pay allowance. 

For unions, it has spmled bad 
news iii terms of membership 
and the degree of control they 
can exercise over the running 
of the industry. Ucatt*s member- 
ship has rained somewhat in 
toe past two years following an 


John Gapper on 
the tax gains 
of being 
self employed 

Intensive recruitment dampaigh, 
but Is still down to some 250,000 
from 830,000 in 1080. 

Ucatt’s official poDcy so far 
has been not to recruit any 
self-etaplbyed Workers aftd to 
rely instead Oil resisting toe 
growth ih theit numbers by 
uyihg to tighten joint industry 
agreement and supporting mea- 
sures SnCfi as lbCfel authority 
contract compliance. 

The strategy is about to be 
weakened farther by the Local 
Government Bill's provision for 
the outlawing of contract com- 
pliance. Xnboiir-cbntrolled coun- 
cils Will mo longer be allowed 
to insist that companies carry- 
ing out construction work on 
their behalf do net use self- 
employed workers. 

Ubatt wAs given Another push 
last month when toe EETPU 
eleetriciahg dropped a similar 
policy .of refusing to co-operate 
with the EleCti-icai Contractors 
Association in its attempt to 
change joint indstry structures 
to take account of the — less 
pronounced -* rise of self- 
employment In that sector. 

The EETFU and toe EGA 
both argue that self-employment 


is likely to spread to toe same 
extent as ih construction as a 
whole unless they react fast. 
They are now discussing altera- 
tions to toe EGA's newly estab- 
lished labour agebey for self- 
employed cbntract electricians. 

But the sector — in which 
there are estimated to be some 
12,5(10 self-employed workers 
compared to 32.000 directly 
employed — is uh usual in that 
the employers’ federation and 
the major union are in agree- 
ment on trying to stop self- 
employment spreading too 
widely. 

The BulidiUg Employers Con- 
federation, representing 8,000 
CdBip&nies, now believes that 
the presumption again Bt self- 
ethpieymeut built i&to its 65- 
year-oid joint agreement with 
Unions si outdated ahd on 
unions is Outdated and bo 
the construction Industry. 

It argues that befeaUse com- 
panies ftmttacti&g Work to self- 
empioyed workers must pay a 
2 pet tent training levy to the 
Cohstfuttidb Industry Training 
BOard — agfeinst 1 per cent for 
a directly employed worker — 
little damage is being done to 
the industry’s future. 

Training, may be the area in 
which Ucatt will move towards 
taditiy accepting self-employ- 
mefat The. employer side of toe 
GiTB would tike to see toe self- 
employed brought within the 
scope of training grants for toe 
first .time under a pilot scheme 
for toe farming out of appren- 
tices to smaller companies. 


Congress discovers the joys of the marketplace 


OtfigR LABOUR NEWS 


THfi «i a mare 

market-based trade tflnflhflim 
has been touch ffi. etfidfence at 
the drst-eVer ' TUG Ca&grtsd 
exhibition . 

With its 5fi stands, the exhi* 
•; bitten has provided delegated 
■ "and visitors with the potential 
of a marketplace lUMt - ad 
diverse ds tt any employer* 
ctJhfofeflCe. 

The duly fcdffipaWes officially 
‘ barrtd; fodfo jpfcrtici&tlhg wftrd 
those the TUG considered coiild 
cause “deep and widespread 
offence” — that is. any with 
iUvdstiftenfe i& South Afrit* of 
wife a retetd trf ahttuniou 
activity. 

CAmpaflles like . Eurotiffifael 
and British Ntidter . Fuels* 
Which are offensive to feomd 
Uttiohd but not ©there, fiavd 
been allowed to .ekhlBft fifafop 


Jimmy Borns on a profitable, exchange- of views 


side lobby groups ahd chanties 
gttiffi fed titt AdtoApferiheid 
Movement, to© BritfMfivfet 
jme&ffiship dMtety ana the 

QMrttier Am Fomtoatimu 
Aitsouga to© event u mew 
the TUC, appears to hfete hfed 
infifr drfKuny fltaaflisg ±sg 

h&mes — ■ Britidfi Airways had 

Bteti gtme feWsy pfess and 

tunnffig & chmm itfoi fbf ffee 
flights tt-NW Ybffc 
Qime apart from generating 
much needeti .revenue “- tod 
TUC has made £ZD,0ti0 from 
leasing tofe fefoUfe **■ mi SUUbi* 
tien has provided delegated 
with ready accede to fee ktod 
of serrioea they are mldef 
inereasihg nterimre to .use ad 
they struggle to retain and 
recruit membership. 

Few eabihitore are more. com 
Vtoced of this tout AILted 


Anglo Financial S&Vited. a JSfl* 

rate ettapa&y set up two year* 
dg© by an lhvestt&feBt COftsUh 
tout 

The ^eoffipany. Which ^ had 
Invested mbre than S.OOw In 
toe exhibition. Mf Dfefftk 
Owdad, fe tfbde uUlCn^ ture|d 


mys: “mde ^Ufilftfiists have 
money to speed and they want 
to fesw Where it feafl Beit be 
put** 

Eto temswny to already after* 
Ing aovtiM ©a group peasfote 

to .e#M, ■ feft white arftiif sec; 

of fee NfetidUal Union bf 
MinewOritefB*. Sftd Civil ser* 
vants* Moffi. It claims to have 
over 100 fedwiduai tradd 
unionists as clients. 

KL fee Computer manufac* 
hirer has altofefly. booked spaed 
■fto n repeat efeibtiten hart 


year, tt ts devet&ptng wife UK 

software companies a range of 
specific ShfbhUatidii . systems 
with trade union applications. 

ICL has invested £10,000 in 
publicity at this year’s Congress 
and has no doubts feat it is 
money Well spent The com- 
pany has already |dld legal aid 
systems t6 fee AEU oogUkeer- 
ifig unioto fee NUM kbd fee 
National Union bf Tallofs ahd 
Garmenlworkers, 

ICt bas also tailored a Apoli- 


tical lobby system — provid- 
ing computer-based information 
on politick and political trends 
— for Tass, the left-led white- 
collar union, 

Mr Chrifc Abdey, ISj'b ex- 
hibitioh representative says: 
“The key thing is feat fee 
TUG ntfw realises feat if it is 
to survive as a services organ- 


tettffth to the 1090s, tt to gatog 
to have to concentrate on pro- 
viding quick and efficient in- 
formation .to its members . . . 
I’ve no doubt that we’re in 
bustoeSS.’' 

British Telecom initially saw 
its presence at the exhibition 
fas strictly a pUBlie reMtibUs 
fexerdse. But it has also 
kecured a number of Sales 
. A&fiofdffig. to Mr Norman 
Howaffl, BTs public affairs 
executive, fee company’s busi- 
ness fefortnatimi services and 
pbctable telephone systems had 
'proved Vel*y 0O|)uIar 

Much of fee platform feetbric 
this wefak Ms Suggested that 
many left-wing trade unionists 
still reg&rd g&agetry ahd ffliage^ 
buildidg Wife -suspicion^ But 
in the tifeibitiea hfaU the si^s 
are thftt a new era IS daWUifli. 


Key ruling Tory unionists rap 

proposed strike law 

redundancy w ywui* iAs^tt, labour editor 


THE 

NORTH WEST 

Hie Financial Tiinds proposes to prtUMl B 
Sninrey off the above oa 

Friday, o 

torn full editorial synopsis add details of 

avaiiaWe advertisemwit positionsj 

please contact: 


Airlines merger proposal 
backed ‘to save jobs’ 


BRIAN HERON 

on 061-834 9381 

©f Write to him at s 
Alexandra Bfuldings, Qtrecfl Street 
Mancbester ^M3 
Tdex: ®M813 


GONGBESS backed 0 call oh 
the Government to approve thb 
planned merger trf British Aif- 
woya and British Galedeniah 
Ainveya. 

AH fentefgmWy motetioh oh 
fee im& vm aeeiarea earned 
by “A V6?y Ifafgb mojdribr** 
aftef iBsftftfeiS fTOfe airlinfe 
Wttffitefff tolftfiS Warttefl feat 
t&intofands of jobs wuHi.fae at 
r&k If Wife filfergCr Was retried. 

'MtiAStfsJitMB; 

the white-collar bsk^. told 

delegates the idea, of BC&l ah 
a "second force” was dead: 
BrheM needed ft strong, staglfe 
main- _airune to compete with 
fee US “mega earners.” 

“ Surfeiy we are abt going tb 
tabmmil the folly of h&hdinfe 
tiver BA to fee AtnericfinB like 
a plump chicken waiting til be 
praeRga,” Be g&ia. 

Mr Mark Yomig, general 
secretafy 4f fee Balpa dirilne 
pilots, said a BA L BGal merger 


wdhfd create 
to ohfespana 
to fateuM to 


jobs 
Warkrit "It 

i that w fifa u 



• A takeover should only be 
allowed on fee Understanding 
that the purchase wofcW not be 
resold for HVe yeafa, delegates 
decided i 

They ttofafitabtisly batted, a 
wia<?rari&rig fflbtibd aa take- 
overs whstn toiled for new 
tegidto&m to ensure! employees 
would be CbhsulVea dUri&g a 
mergeft 'Vehsibb funds would 
be protected estnbMfe fan 
Eniptoyee PfottCtiOn Agency 
mm reverae fee ohus of proof 
id feat fiiefgew owy be 
allowed if they touia be shewn 
to be in fee bhbUc ibtef^ti 
^eiegatefi went o& to ta&fc a 
toll for fee G&verftfiteht td sub- 
stantially InCfMse ffi'VfesS&Cnt 
in iibfi-defefice research ahd 

investment 


-yicfcy '■ »rwf y\ 

: S: W. A i* | 

^ -■-m 



EUROPESBUSlNeSS NEWSPAPER 


FT-Aetuaries 

World 

indices 

A &z&ge booklet giving details df fee fodet aafl 

selection process, together .wife technical appendices, cafl 
U4 obtaaea free 4£ charge by sending a Btamped) 
addressed Alwlre envelope u: 

Miss LbArfiAe Spddg: 

Financial Times 
Pabtietty DephrtmeAt 
BnCteb House 

10 Cannon Street, totiflon EC41* 4BY 


Norman Witiis ltoteliB io- 
fehtiy to fa derate 

Approval for 

levy against 
apartheid 

Trade unionists are to be 
urged to contribute a voluntory 
levy to help imost fee tug’s 
ftoaticial fakstetehte tb snuth 
A fwtoa anseafi opposing 
Aphlttff Sfe. 

A fefiSbh feptl&rtafig a levy 
equivalent to one Hour’s pay 
was unanimously approved by 
Googroes after one of fee most, 
emotionally charged debates of 
the. week. The levy is eifrected 
to faobfi feb SO,D00 fee TUG 
reeway sfet aside fit relief sfifi 
legal assistance to South 
AlHtofi UfilbftS. 

Mr Uavies, general 

secretary of fee feopworkers 
union Usdawi who recently led 
a delegation to South Africa, 
described fee regime in that 
country as fee “world’s worst 
example of sum's inhumanity 
to man.” 

Following fee vote, delegates 
ttm fa tehgto? Standing oVation 
to fa viffltinfe tfolfagittioh from 
Sodtfi Africa Of black trade 
UfiiOhA 


By David Brincflc, 

Labour Correspondent 

A HOSPITAL worker has won 
a key ruling Under European 
law that women workers must 
be paid the same severance Or 
redundancy pay as male col- 
leagues. 

The department Of Health 
and Social Security sfald yester- 
day that the ruling, by the 
Employment Appeals Tribunal, 
could have wide implications. 

The ruling follows a 
judgment fort yri&? feat Womhn 
must net be compelled to retire 
At. fan earlier age than mfale 
Colleagues, it is likely tb add 
to pressure for introduction of 
a common state pension age. 

The EATB decision this week 
was in the case bf Ms Mary 
Gatoi a former domestic, worker 
at Qufeen Charlotte’s Hospital, 
West Uffldofl, Wfib was made 
redundant last year when her 
job was privatised. 

Because Ms Cato was just 
two months short of her 60th 
birthday, and therefore retire- 
ment she lost most of her 
fedriridaricy erititletoem bf 
f5,Ml for IB years’’ service^ 
Unde? National Health Service 
rules, she received ohly £990. 

Backed by Cohse, the health 
workers’ union, Ms Cato's claim 
for p&yrfeni bf hef full. entitlS- 
irient waS Upheld by an 
industrial tribunal Under the 
1976 EC Directive on Equal 
Treatment 

The BBSS backedm an appeal 
n gninet- this by the. Hammer* 
pmth And QUeen Charlotte’s 
Special Health Authority. But 
fee EAT has gone even further 
thaft fee tribunal fahfi ruled In 
favbtu* bf a droafe-appeal by 
Cohse (bat Ms Cato was un- 
fairly diserhnioated against 
under Article 119 of the Treaty 
Uf R&tofc 

This use of the article, one 
of fee first direct applications 
Bf EC tow by UK efturts, In 
effect Brings severance terms 
under equal pay regulations. 

Cohse says fee National 

Mfaalfe Servite — ind poBsiWy 

ofeef employers — #ill Bfa 
obliged to pay full severance 
taring to women unless they are 
over 64 and therefore trf a& age 
whefi Hiile colleagues would 
also lose sttfittfe entitlement. 

The uhion believes the effect 
to ay bfa Bidhaaied for Women 
Who have lodged discrimination 
riaiwe. MS Juakh Carter, 
Cohse’t equal opportunities 
officer, said: “We think this 
to A major victory for equal 
rights." 


CONSERVATIVE TRADE 
unionists are pressing the 
Government td drop its new 
employment fow Proposal which 
would prevent unions from 
disciplining members who go 
to Work in even a legally- 
constituted strike. 

The opposition to the pro- 
posal, the bo-called “ scab’s 
charter .from the Conservative 
Trfade . Unionists’ Organisation 
—fee T&ry party’s Own trfade 
ta&ioh farm, based in Conserva- 
tive Central office In Londoh — 
Will be highly embfartasSing for 
Ministers, who claim their 
plans for hew legislation are 
widely supported By moderate 
union members, if hot by toeir 
more militant leaders. 

CTU officials are to mefat Mr 
Patriek Nicfiolls. junior employ- 
ment minister, shortly to discuss 
th&ir Opposition to this and 
another key part of the 
Government's plans; which are 
expected to be disclosed folly 
in a biH to be published riext 
month. Informal discussions 
between the CTU and Mr 
Nicholas tome plarie last night 
fat the otgariisalii&ri’s reception 
fat fee TUC Congress 

The f&rffial meeting will 
follow recent talks with Hr 
Norman Fowler, employment 
secretary, and fee tabling of 
fefa CTtrs critifcismfa in a sub- 
mission to thfa Department of 
Employments 

Though the CTU has criticised 
the Government before — especi- 
ally over its banning of trade 
inUtihg fat GCHQ Cheltenham— 
it has hfaver dbrie So oVer fahy 
i& proposals for labour law 
refom 

Whilfa CTU WelcbiiifaS much of 


legislative proposals outlined 
earlier this yeah In a green 
paper, ahd especially fee tesab- 
lishmeht of a. Special Trade 
Uhlrih Commissi onfar, it is un- 
happy bn two issues discipline 
fana elections. 

ffi discipline: The CTITs 
national committee over- 
whelming decided against the 
P’rbpbSfal tb prevent unions 
disciplining members who cross 
picket lines and go to work in 
a Strike, rive nif that strike has 
been folly and legally 
authorised by ballot. 

The &TU believes feat this is 
Wholly inconsistent wife fee 
rigidly ballot-based democracy 
of the Government's previous 
fainploymefat law, ahd would be 
ripea to exploitation by 
mavericks. 

It feels valid upon majority 
decisions ough t to be accepted, 
with trah CTU member saying: 
“We don’t see firiW you can be 
member* of the club, ahd hot 
a Ccfepf fee dPCisibn bf the 
majority of fee members.” 
fe El eriti fails: The CTU feels, 
although With 1&&S force than on 
aisciplihe, that the Govern- 
ihehffa proposal for many mfare 
fanibfi Officials to be elected is 
irfelevfaht tb the practical oper- 
atlofaof infafay unions. However 
thfa CTU accepts it is necessary 
for aoin fe, sfa ch as fee NUM 

The CTu is urging the 
Government hot tb include the 
first of fefase proposals in the 
bill. Mr Alan Palil, CTU chair- 
ittah, Said yeSterdfay: “We are 
concerned that with the vast 
majority of trade .unionists who 
think feat the legislation so 
tor has been good. This could 
haCe fail advefofa effect 6x1 what 
fifas beea so popular.” 


Air traffic edglneers say 
pay dispute is hardening 

BV JIMMY BURNS, LABOUR STAFF 

titft&N tfeAhSfe yesterday been “resolved ” it also claimed 
said feat a pay dispute involv- fee dispute had caused no 
lng air traffic control engineers flight delays this week, 
is .hardening and Co did lead to However, it confirmed fee 
tteiayB .ln flights to find ftbra predictions of union leaders 
fee UK this Weetefife fefat fee situation could change 

Thfa Week-long national action for the worse if there was any 
BY tile fahgfeefers, Who dVefSee failure to aby of the main com- 
crucial equipment such as cbm- putters which feted ibformation 

U1(«K aba UflU AW IhAAl 'iuhiHIVinD air 


putters aha ratter fai 
Bas focused oh fa wife 
overtime worth 


jjfheht, oh IbCal ahd 'overflying air 
iWfal of traffic. ... . , . 

’the CAA itad union leaders 


vvetuu« wot XUe umuu icaucis 

But yesterday thero were re- are to meet in London on Mon- 
pem that OB Wfediiesdhy a day ih.ah attempt ^ to fifid a peace 
group of engineers lit the main formula. The 1800 engineers 
UK fait cdflttnl centre at West have threatened tb consider ail- 
Ut&ytou had threatened to walk out strike faction after Septem- 
out after mahageaeht had bar lB antes fee CAA agrees 
askted them to fill in for fane of to substantial pay increases 


their absentee colleagues 
Tne Civti Aviation Au 


N4V4 ATBtWU 1 

yesterday said fete ptofiteffl has trolleTS, 


similar to those negotiated re- 
rentiy by fen air traffic con- 


/£&•:'* -i* ,-V^; 




12 


Financial Times Friday September 11 1987 


MANAGEMENT 

Profit-related pay 

Not such an easy option 

Richard Waters examines the background to a new system °f motivating UK employees 


CAN PBOFIT-related pay 
schemes succeed in the UK, or 
will they raise expectations 
among employees beyond the 
ability of companies to deliver? 
The intention - that linking part 
of workers’ pay to profits will 
motivate them - is fine in theory, 
bnt will it be hard to achieve? 

As the time fast approaches 
when many companies must de- 
cide whether or not to intro* 
duce such a scheme - profit re- 
lated pay (PRPf was introduced 
in this year’s second Finance 
Act and is an arrangement 
which allows up to £1.500 of an 
employee’s pay each year, over 
and above usual allowances, to 
be free of income tax - two op- 
posing views of their worth are 
emerging. 

One view has it that PRP will 
be a huge success. Already, 
23,000 companies have ex- 
pressed an interest in finding 
out more about it, says the in- 
land Revenue. (Only schemes 
recognised by the Revenue will 
qualify for the tax relieL] 

The opposite view is that prof- 
it-linked pay will add to a com- 

E any's wage bill, and so will not 
e taken np by many. The pessi- 
mists also argue that companies 
are asking for information 
about PRP schemes only be- 
cause they fear employees will 
push for them. 

"Every responsible employer 
has got to find out what It is all 
about," says Ken Schwarz, direc- 
tor of remuneration at manage- 
ment consultants Inbucon. "The 
real test will be the take-up." 

The Inland Revenue last 
week produced guidance notes 
which should help employers to 
decide whether or not to intro- 
duce a PRP scheme. 

At the same time, though, the 
Revenue says that it cannot 
guarantee to register a scheme 
in less than three months - 
though it may be able to process 
applications in less than this 
time. Schemes must be regis- 
tered before the start of the fi- 
nancial year to which they re- 
late. 

This means that companies 
with financial years ending on 
December 31 - a common year- 
end date - must register a prof- 
it-related pay scheme before 
the end of this monlb to be sure 
it will come into effect for 1988. 

Otherwise, the first period for 
which the scheme can operate 
will be 1989. This would not 
show through into employees' 
pay packets until well into 1990. 
when profit for the year has 
been calculated and verified by 
an independent accountant. 


PRP is intended to be more 
than just another executive 
perk. Linking the pay of employ- 
ees directly to profitability is a 
political goal judged well worth 
the £50m it was originally ex- 
pected to cost the Exchequer. 

Cynics claim that it will not 
only be the Exchequer that 
loses out Employees will see 
PRP as a tax-efficient bonus - 
adding to wages, rather than re- 
placing an existing slice of pay. 

"People will expect their nor- 
mal pay increase, whatever that 
is. and on top of that a PRP 
scheme. That is bound to lead to 
an increase in the salaries bill,” 
says Schwarz. 

The experts do not agree on 
the motivational benefits which 
could justify the extra costs of 
profit schemes. The effect can 


pay has to follow the profits of 
the company as a whole 

Companies opting for PRP 
schemes will therefore he mm. 
mitling themselves to a heavy 
communications burden if the 
schemes are to work. An unde- 
sirable side-effect of this will 
be that profit and loss accounts 
for individual units or subsid- 
iary companies, hitherto re- 
garded as commercial secrets, 
will be made public for the first 
time. 

Having made the decision to 
set up a scheme, employers face 
two key questions: which work- 
ers should be included in a 
scheme, and how should the 
profit-related element of the 
pay be calculated? 

The Revenue’s rules are 
drawn widely to allow any unit 


The Inland Revenue says that it 
cannot guarantee to register a 
scheme in less than three months 


be measured when an individu- 
al's pay is linked directly to his 
or her output or some other 
measure of personal perfor- 
mance. But the weaker an em- 
ployee's influence over profit, 
the less effective the scheme Is 
likely to be. 

The decision to link profit-re- 
lated pay to net profit rather 
than some other measure of 
performance, such as operating 
profit further weakens the link 
between performance and re- 
ward. It means that factors 
which are outside an individual 
group of workers' control - such 
as the rate of depreciation 
charged on equipment or ex- 
ceptional write-offs incurred by 
the company as a whole - can 
have an affect on their earnings. 

Workers may therefore find 
themselves operating moreeffi- 
ciently, but see "profits’ de- 
cline. The manager who can ex- 
plain the fairness of this to 
employees is a rare anim al. 

The problem stems from the 
Government's desire to marry 
two aims which are not always 
compatible One is to reward 
employees on their perfor- 
mance The other is to achieve 
the economically desirable goal 
of providing a buffer, in the 
form of a reduced wage bill, for 
firms with falling profits. The 
latter means that profit-linked 


within a company to have its 
own PRP scheme Several 
schemes can exist side by side 
(though employees in more than 
one only get the tax relief once). 

Examples given in the Reve- 
nue’s guidance notes include 
functional or geographical 
groups within a company. De- 
fined groups could also include 
all those involved with a partic- 
ular product, regardless of their 
function or location. 

Any sub-division of a compa- 
ny's operations is acceptable, in 
fact - provided its performance 
can be audited by an indepen- 
dent accountant. 

The requirement for an au- 
dited profit and loss account is 
likely to be the main limiting 
factor on the design of PRP 
schemes. For a start, employers 
will bear the extra cost of the 
audit 

The Revenue, while conced- 
ing that there will be start-up 
costs in designing and getting 
professional advice on schemes, 
claims that costs in future years 
will be minimal. 

The profit and loss account 
rale also raises the question of 
bow income and costs are to be 
allocated between different 
groups within a company. In ef- 
fect it means that only those 
units accounted for as profit 
centres can have their own 


scheme - the alternative being 
to adopt a scheme for the com- 
pany as a whole 

T can see difficulties where 
the company's structure is not 
one that matches the units," says 
Professor Michael Bromwich, 
president of the Chartered In- 
stitute of Management Accoun- 
tants and CIMA professor of ac- 
countancy at the London School 
of Economics. Generally, 
though, companies' manage- 
ment information systems are 
sufficiently well developed to 
produce the type of information 
required for a PRP scheme, he 
says. 

The profit and loss accounts 
must conform with Companies 
Act requirements. The cost of 
producing these figures and 
having them audited should 
give companies pause for 
thought, particularly if schemes 
are designed for small groups of 
workers. 

The costs to partnerships, 
which are not required by law 
■ to produce accounts to the Com- 
panies Act requirements, will 
be greater than those to compa- 
nies. Setting up a PRP scheme 
will involve them in preparing 
two sets of accounts and under- 
going an audit for the first time. 

The second key question is: 
how should the profit-linked 
pay be calculated? Two meth- 
ods are allowed, both of which 
permit companies to set an up- 
per limit on distributions. This 
is expressed as a percentage of 
the previous year's profits. For 
instance, a "ceiling” of 150 per 
cent of last year’s profit wifi 
prevent extra profits being dis- 
tributed. 

Also, a "Door* can be set This 
prevents any payment at all if 
profits foil below a determined 
level 

The first of the two methods Is 
based on a simple percentage of 
profits earned by the unit 

The second is based on a 
more complex calculation 
which enables companies to 
limit the effect of rises or foils 
in profits. Only a pre-arranged 
fraction of the rise or foil filters 
through to employees' pay pack- 
ets. This is likely to be palat- 
able to companies whose foture 
profitability is uncertain. 

Many companies will not 
need to mull over these issues. 
Hose that already operate 
cash-based profit-sharing 
schemes are likley to lose little 
by turning them into recognised 
PRP schemes. They virtually 
provide a guarantee from the 
outset that PRP will be a suc- 
cess. 


Domestic appliances 


YOUNG TIMOTHY PARKER, 
going on 32, sounds ambivalent 
about his company’s best- 
known product. He regards the 
Kenwood Chef, going on 40, as 'a 
useful elephant* and thinVc it 
positively unsexy alongside the 
up-and-coming generation of 
kitchen gadgets. 

But he also recognises that 
were it not for this heavyweight 
helpmate, the Kenwood compa- 
ny would have lost tax more 
ground in the small appliances 
market, and might well have 
been thrown out of the Thorn 
EMI stable along with the job 
lot of washers, cookers and oth- 
er major appliances sold for a 
song to Electrolux earlier this 
year. 

"Were it not for the foct that 
we have the Chef we would have 
had a tough time,' he says. "Fifty 
per cent of the profitability of 
the company still derives from 
this prod act.* 

These profits, rare enough in 
an industry plagued by the slim- 
mest of margins, and the fact 
that the Chef has kept the Ken- 
wood flag flying in many over- 
seas markets, are valuable 
props to Thorn’s and Parker’s 
belief that the business can be 
made to blossom. 

It could take some time. 

Parker, who gave up a job in 
the Treasury (and a 'paltry sala- 
ry") to move into industry, 
skipped briskly through two 
other posts, in the US and at 
Crypto Peerless in Birmingham, 
■before alig hting at Kenwood a 
year ago. 

"My resting time here could 
be longer. I don’t like to leave 
until the building blocks are in 
place. I want to ensure we get 
solid expansion in what can be 
a seasonal, blippy market” 

Stage one has been a rapid 
but controlled extension of the 
Kenwood range. Modern multi- 
ple retailers who dominate the 
market tend to stock a brand on- 
ly when it offers a fall range or 
associated small appliances - 
hence the appearance of Ken- 
wood irons, foyers, toasted 
sandwich makers and the like. 

This diversification was un- 
der way before Parker was ap- 
pointed. However, the company 
had been slow to recognise the 
need for range extension, and 
its early efforts to catch up cre- 
ated something of a muddle - 
both on shop shelves and in the 
company. 

Now it has an advanced prod- 
ucts group on its R&D payroll 
briefed to think four or five 
years ahead, and re-educated la 
commercial realism. 

"There had been a lot of spec- 
ulative R&D work," says Parker, 
jibbing at the self-indulgent sys- 
tem which spawned too many 
ideas that showed themselves to 
be unprofitable once they were 
too for down the development 
tine. 

For the present, Parker's at- 


Mixing an 
export menu 

Christopher Parkes on Kenwood’s growth plans 


Timothy Parker 
(right)and Kenwood’s 
System K range (below) 
to be launched in time 
for Christmas. The new 
product - a series of 
cordless appliances each 
with its own 
wall-mounted charger 
which can be purchased 
individually - 
demonstrates 
Kenwood’s new product 
philosophy. "It is an 
innovation and 
encapsulates a lot of the 
things we are trying to 
do, "says Parker. 




tention is tightly focused on the 
company itself "Lots of compa- 
nies in our business are inter- 
ested mainly in market share 
and big volumes." he says. "Bnt 
the crucial thing is to build a 
cost structure that will give a 
very good profit in boom sales 
years and sustain the business 
in leaner times. 

"We want to get our overheads 
down, build the range and get 
into a position where we can 
spend 10 per cent of sales on ad- 
vertising and still make a prof- 


it" 

Once this is achieved, Ken- 
wood has a chance to become a 
properly international compa- 
ny. 

The signs are already present 
in new stylings' from Kenneth 
Grange at Pentagram,' which 
echo the sophisticated "Euro- 
look" of brands like Braun and 
Krups. 

Although 60 per cent of Ken- 
wood sales are made overseas - 
its strong presence in Scandina- 


via and the old European Free 
Trade Area (Efts) reflects its 
rather aged marketing profile - 
Parker really wants a piece of 
the US market 

European-style small appli- 
ances have bridged tile culture 
gap, and sell well there at a pre- 
mium. But the high cost - of 
launching a new consumer 
brand in the US is a formidable 
obstacle, as giantslike Unilever 
can confirm. ■ ’ 

Earlier Kenwood . foYays 
failed, Parker believes, because 
the company had unrealistical- 
ly high expectations of wtidt 
coaid 'tie achieved in a short 
time with a small budget 

His way is based on a five- 
year strategy based on the skills 
and energies of entrepreneurs 
who know the market "We have 
found one or two guys who think 
they can make their fortune by. 
marketing our products,” he 
says. 

' With premium products with 
real features to back their con- . 
viction, their approach will be 
to work hard at the department' 
store chains. 

"Get into Maceys and Bloom- 
ingdales will probably be inter- 
ested-after that comes Wilbur 
B. Schmaltzer on the West Coast 
'and all the other specialists-,"’ 
he says. 

However, marketing and styl- 
ing. are only relatively small 
pans of the overall rproducL” 
Kenwood's international com- 
petitiveness is the key, and, ac- 
cording to Parker, a real 
strength which it shares with a 
growing number of ’British man- 
ufacturing companies. 

"Quite a lot of UK manufactur- 
ing is leanish and meanish,” he 
says, having been prodded into 
action by European competitors 
and having woken up to the fact 
that it has advantages which 
can serve it well in internation- 
al markets. 

"The exchange rate helps " he 
says. "But there have also been 
very significant improvements 
in productivity - and not just in 
terms of capital equipment re- 
placing people." 

People are working more effi- 
ciently, harder,- and doing 
things differently. Overheads 
are leaner, and labour bills are 
'greatly helped by relatively low 
social costs such as national in- 
surance. Social costs in some 
European countries, for exam- 
ple, can add 50 to 60 percent to 
basic salary bills, compared 
with 20 to 25 per cent in Britain. 
Even Hong Kong is losing some 
of Its competitive edge in the la- 
bour market, Parker says. 

Recognising these advan- 
tages, the company is increas- 
ing the number of products it 
makes in the UK, spending £5m 
, on plant and increasing its la- 
bour force. 

If Parker can get the Kenwood 
elephant moving again, it may 
prove difficult to stop. 


TECHNOLOGY 


Following looks at superconductor science at Oxford and Cambridge universities, 

Jane Rippeteau talks to Birmingham researchers 


A PERIOD of consolidation is in 
store for scientists worldwide 
working on new superconductor 
technology, predicts Christo- 
pher Moil-head, lecturer at the 
Department of Physics of the 
University of Birmingham, and 
one of the UK top’s researchers 
in this field. ' 

Muirhead, just back foom two 
key industry conferences in Ja- 
pan, says: "There weren’t the 
cries of’Eureka!’ that have been 
going on. The initial frenetic 
stage, when the totally new phe- 
nomenon was being described 
almost daily, is now Rattening 
out a bit" 

The two August meetings 
were the 18th Low-Temperature 
Physics Conference in Kyoto 
and the International Supers 
conductivity Electronics Con- 
ference in Tokyo. 

Discoveries of varying impor- 
tance have come thick and fast 
since so-called "warm supercon- 
ductors” were discovered last 
■year by scientists at an Interna- 
tional Business Machines re- 
search centre near Zurich. 

Scientists elsewhere quickly 
confirmed the work and im- 
proved upon it: soon the world 
had a recipe for a metallic ox- 
ide that would transmit elec- 
tricity without power loss for 
more efficiently than anything 
previonsly thought possible. 

Tbe implications, particularly 
for the electronics and electri- 
cal power industries, are tre- 
mendous and researchers and 
industrialists alike began 
talking about cheap power, fas- 
ter computers, trains levitating 
above their tracks, and other 
applications undreamed of to- 
day. Scientists scrambled to de- 
velop the technology - and pa- 
tent their findings. 

But the rush to be first has 
created a storm of questionable 
reports, critics say. Several re- 
ports from the US and Japan, 
for instance, claimed finding 
the Holy Grail of superconduc- 
tor research: materials working 
at room temperature. But none 
were confirmed independently. 

Such "sightings" are now 
known in the scientific commu- 


11 I DON'T KNOW How / WftNAGED 

before: S U PERcoN DUCrToKS . ** 



* 3flN\ 


Mixing sake with 
superconductors 


oity as "USOs," for “unidentified 
superconducting objects." 

"People have been unable to 
reproduce otber people's re- 
sults, and in some cases can't 
reproduce their own," notes 
Muirhead. At Cambridge Uni- 
versity’s Cavendish Laboratory, 
physicist Yao Liang taps a filing 
cabinet crammed with recent- 
ly-published papers on the sub- 
ject. "Eighty per cent of this will 
be In the dust bin in six 
months," he says. 

To Muirhead, the shakeout 
heralds a period of more fruit- 
ful research. Much work is fo- 
cused on finding recipes - most 


mixtures Include yttrium, bari- 
um or strontium, copper and ox- 
ygen - that will wort: at room 
temperature, because then no 
costly or cumbersome cooling 
systems would be required. 

Other work plumbs draw- 
backs to commercial use of the 
new materials: they are of a 
brittle form difficult to fabri- 
cate into useable shapes and 
they have a "current carrying 
capacity" for interior to conven- 
tional superconductors. 

Physicists such as Muirhead 
feel the only way to unlock 
these riddles is to understand 
the basic structure of the com- 


pounds. Scientists are not even 
sure yet why they work. Millions 
of dollars of research spending, 
to pay for people, materials and 
equipment, is expected to be 
spent on the problem. 

In this regard, Muirhead 
brought back a gem from the 
Japanese conferences: just as 
one cook knows secrets to a suc- 
cessful souffle that another 
lacks, Muirhead gleaned details 
for cooking np single large crys- 
tals of his superconducting 
compounds that he had previ- 
ously been unable to grow. 

"What I brought back,* he says, 
“was the really vital little tricks 


MUCH OF this year’s _ hoo-ha 
over new superconducting ma- 
terials has focused on a brave 
new world of cheap power, fas- 
ter computers, low-cost medical 
scanning and other applications 
that the new technology could 
make possible. To do these th- 
ings, several major technical 
obstacles must be overcome. 

However, some less ambitious 
applications may be possible 
sooner. 

A key limitation of the new 
materials that perplexes re- 


A SQUID goes in search of submarines 


that I got over a bottle of sake 
one evening.” 

The development of single 
cyrstal fabrication techniques 
is an important step in the in- 
cremental moves scientists are 
making to understand and har- 
ness the new technology. 

Researchers feel it is essen- 
tial to have single crystals of the 
materials for their work. 
Clomps of many small crystals 
bunched together wind up at 
angles to each other and are 
separated by boundaries. Just 
as soap bubbles burst if their 
walls are punctured, crystal 
boundaries effect the way elec- 
trical current moves thorn one 
crystal to another. 

This interferes with the elec- 
trical transmission capability of 
the material: it can transmit 
electricity with almost no resis- 
tance, but it cannot do so in 
great volume. 

At the conferences, says Muir- 
head, "there was a lot of de- 
tailed Information on how to 
grow these crystals. It is now 
clear there are no major obsta- 
cles to growing large single 
crystals" of several centimeters 
in size. 

To date, Muirfaead’s team at 
Birmingham has been able to 
build single crystals of less than 
one millimeter in size. He de- 
clines to specif? what new tech- 
niques will help him improve 
on that. But he adds: "A lot of 
the really good science in the 
next several months is going to 
be done on these single crys- 
tals." 

Birmingham, a contender for 
the UK Science and Engineer- 
ing Research Council’s planned 
superconductors research cen- 
tres, has in place a research 
"Consortium," headed by Colin 
Gough, senior lecturer in Phys- 
ics. This consortium co-ordi- 
nates work under way on super- 
conductivity in seven university 
departments. Some are con- 
cerned with basic science, and 
others with applications. 

According to Gough, seven of 
some 45 individuals involved so 
for spend 100 per cent of their 
research time on the new tech- 
nology. 


searchers is that while they 
transmit electricity without 
power loss at convenient "warm* 
(though still sub-freezing to hu- 
mans) temperatures, they can 
do that in current quantities for 
inferior to conventional super, 
conductors. 

But at the University of Bir- 
mingham, physicists have dem- 
onstrated a magnetic detection 
device, called a magnetometer, 
that does not require high cur- 
rent density. Colin Gough, se- 
nior lecturer in physics and co- 


ordinator of the university’s In- 
terdepartmental research in su- 
perconductors, has already 
filed two patents on the technol- 
ogy, one In May and one in July. 

This is a real device," says 
Gough. "It is clear there is an 
immediate application because 
It is not limited by the critical 
current* He says that several 
industrial companies, one Japa- 
nese, have shown interest in the 
device. 

Gough's magnetometer would 
be no more effective than simi- 


lar tools now available based on 
conventional superconductors. 
But, because it works at temper- 
atures that do not require ex- 
pensive and unweildy cooling 
systems, it could be considera- 
bly less expensive, be says. Al- 
so, equipped with a long electri- 
cal cord or car-sized battery. It 
could be portable. 

The magnetometer makes use 
of a technology called a super- 
conducting quantum interfer- 
ence device, or SQUID. Because 
is it highly sensitive, it can be 


used to measure exceedingly 
emai l magnetic fields - ones less 
than one-millionth the already 
small magnetic field of tbe 

earth, explains Gough. 

Detection of submarines, and 
measurement of brain waves 
and internal organs without 
suigety are possible applica- 
tions. But Gough sees a particu- 
larly attractive use taking ad- 
vantage of portability that the 
construction industry could 
use: detection of cracks or de- 

faxt, in otiukl nlrwcnr ftiwtars. 



Edited by Geoffrey Charlish 


GM races for the 
sunny outback 

GENERAL MOTORS’ entry for 
the 1987 World So tor Chal- 
lenge on November 1 - in 
which solar-driven electric ve- 
hicles are to race 2,008 miles 
across Australia • will test a 
new Gif electric motor which 
has achieved an efficiency of 
92 per cent in tests. Conven- 
tional motor efficiencies are in 
the 75 to 8S per cent range. 

Hie basis of the motor is a 
better magnetic alloy called 
Kagnaquench. Its ase in an 81b 
GM Deled motor results in a 
continuous mechanical output 
of two horse power at 4JSM rev- 
olutions per minute. 

The one-man GM vehicle, 
called Sunrayeer, will have a 
low streamlined shape based 
on an alnmininm tabular 
str w e t ar e and most of its body 
will be covered with solar, 
cells. The cells will charge 
batteries from which the vehi- 
cle propulsion system will 
work. 


Curtains for the 
lorry thief 

CURTAIN-SIDED vehicles are 
increasingly popular in the 
haulage industry because they 
are cheap and versatile. Bnt 
they present a security risk 
due to the case with which 
thieves can enter by simply 
cutting a hole In the plastic 
curtain. The total loss from all 
road vehicles in the UK In 198S 
was £80m, most of which In- 
volved freight. 

To make illicit entry much 
more difficult Cover Protec- 
tion of Liverpool In the UK is 
offering a secondary, security 
curtain which is plastic- weld- 
ed to the original and has little 
effect on the opening and dos- 
ing action. The curtain has a 
grid pattern In nine-inch 
squares made from a continu- 
ous insulated length of fine 
wire braiding. 

Any attempt to ot through 
the curtain breaks the wire 


and causes an open circuit to 
activate an alarm. The compa- 
ny claims that the cnrtaln caw 
be opened or closed &5m times 

without fatigue-breakage at 
the braid. 

The security curtain is also 
likely to find application la 
railway, barge and boat covers. 
The cost ef fitting to a 24-foot 
vehicle is £806 to £1,986. 


Soft option in 
estate designs 

BUILDERS WHICH are devel- 
oping housing estates can ben- 
efit from a £16408 persona] 
computer software package 
from Eclipse Associates ef Mil- 
ton Keynes in the UK 

Eclipse already offers an es- 
tate modelling package and 
has recently agreed with Red- 
land Construction Software 
(part of the Redland building 
materials and services group) 
to Incorporate Redland's com- 
puter aided design software for 
bouse design. 

The resulting new package, 
called Eclipse-Zeta Z§®§ 8 will 
allow fewesfag estate builders 
to deal with almost everything, 
from overall site survey data 
right through to individual 
house designs and their plac- 
ing on the estate. ■ 


GEC gets range 
of US Abrams tank 

GEC Avionics of Atlanta, Geor- 
gia, a subsidiary of the UK’s 
General Electric Company 
(GEO, is to develop a new type 
of laser rangefinder for the US 
Abrams tank. The company 
has won a $10m development 
contract from General Dynam- 
ics, the prime US contractor 
for the tank. 

The rangefinder system 
makes use of a carbon-dioxide 
laser producing infra-red sig- 
nals that can Indicate range to 
a target through fog, smoke 
and dost. The lasers will be 
produced at Borehamwood, in 
the UK, and the systems devel- 
oped and made in foe Atlanta 
plant. Initial production will 
amount to 68 systems and GEC 
hopes eventually to be mniHn g 
some 608 a year. 


Finns probe Into 
the flow of food 

FINNISH COMPANY Hack- 
maa-MBTef Yantaa has devel- 
oped a compact microproces- 
sor-controlled flow meter for 
Otefeod processing industry. 

J™ measuring bead, monnt- 
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taagnefac coils on the outside. 

A suitably conductive flowing- 
liquid, passing through the 
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The resulting voltage is pro. 


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connection to a display. 

With only two probes in the 
flow line, tbe derice Is hygenic 
and easily cleaned. 


French IBMs given 
the power of speed 

E LAN Informatiqne, 
France, is offering an ww 
sion board and software di 
for IBM personal compute 
and compatibles. This enabl 
French speech to be syntl 
steed from French text whS 
can be typed in on the kf 
team or fed from any source 
baric computer character co 
(ASCII). 

a likely application win 
in teleph one networks wbe 
appropriate responses to so 
tejiters* queries can be ee: 
piled by a computer and turn 
Into speech. Elan’s first UK t 
system, which 
bas come fre 
British Telecom. 


Powerful punch fr 
Unisys’ Hghtweigt 
UNISYS, THE big US con 

formed from S 
>y and Barronghs, has e» 
foe name Smallframe f 
tempnter it Is introdaclii 
an effort to bring "mainfi 

“d fonctio 
ty to the traditional min), 
puter marketplace.- 
Basically, Unisys has 

fiSdV P»teessor 
apace « 

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The company Is claiming s 
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Financial Times Friday September 11 1987 


FINANCIAL TIMES 


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A testing time Jies 


ahead for Kadarism - 


the unique blend of 


compromise and 


gradualism operated by 


the country's veteran leader since 
1956 .Austerity and dripfeed reforms 
are now insufficient to meet the 


aspirations of intellectuals or remedy 


the country’s growing economic 


problems.reports Leslie Collitt 


Grasping the 
reform nettle 

HUNGARY IS facing the most nmm countries. The introdnc- 


UlUMMjr LUtUIO^Cl^ 

unique blend of enlypilenea fa ttBS h« also dope nothing to 
communism and economic re* improve the quality of manage- 
forms, which is the halhnarfc of ment Company directors have 
Mr Janos Kadar, the nation’s been still largely selected on 
leader for 31 yean.. . • • - : the basis of their links with the 

The essence ■ of Kadansu party and government and not 
-compromise and graduzlism-is ftwtiMWT mawag ertai ah iHHwi 
being challenged by an intellecv. Mr Ktidar*s Hungarian Soeial- 
tnal elite which is impatient for ist W o r k er s <Cemanmist)Party, 
wider ranging poli ti ca I ,a n d eco- (HSWPJregartfe his method of 
nomic liberalisation ... drip-feeding reform measures. 

The man in the streets of Bu- to the pojmlns.as irreplaceable 
dapestand other: Hungarian' far two reas ons. . 
cities .however, remains largely •The HSVP remains con- 
apolitical and addicted to con- vinced that after the aborted 
sumerismlronicaUy. he tends 1956 uprisin^Hungarians on- 
to blame the previous economic dentood that only gradual 
reforms for the high rate of in- doses of reform were possible^ 
flation and declining real in- Senior parly officials warn of 
conies the example of Poland in 2980 

Last January, Hungary under- and 1961 when the Solidarity 
went alittle Bang" Introducing trade union pushed the Polish 
competitive, profiboriejited party into the corner with ever- 
commerdsl banks. Atthongh wider demands for political lib- 
lmig overdue, it was ho substi- eralisatkm.) From experience, 
tale for the basic r eforms Mr Kadar knows tliat once the 
needed to restractnre Indu stry bottle labelled ’refiams’ is folly 
and place it on a -competitive uncorked In a Communist cotm-' 
footing. .try, the populations? pent np 

Monopolistic companies cent- grievances wfll pour out nntfil 
tinned to spew put goods which nothing remains -least of all the 
were saleable only 00 - the do- party. 

znestic market or attest ip Go- Neither Mr. Kadar nor his 



CONTENTS 


I. 

'“•■t _ _ _ • * 


' «'r». 





•i ' 

: x 1 

i i \? : * 


_ f- 1 1 


-"'V* 

?* ■ A 


\ ■ 


A;.: 1 ; I 



Ike stalna of St Stephen 

eventual successor, can wish to 
.preside over the elimination of 
the HSVP. For this reason they 
reject the creation of a multi- 
parly system which a good many 
Hungarians favour. the 

HSWP envisages an increasing- 
ly pluralistic society in Hungary 
but under the sole auspices of 

the Communis t party. 

•The second reason is intrin- 
sically linked with the first No 
Soviet leadership can permit 
the weakening of Communist 
rule in Hungary or anywhere 1 
else in Eastern Enrope. Un- 
doubtedly, Ht Mikhail Gor- 
bachev is for more sympathetic 
towards Hungary’s economic re- 
forms than the late Mr. Leonid 
Brezhnev. But Me. Gorbachev 
could not tolerate the party’s 
forfeiture of economic and po- 


litical control which is urged tv 

many Himpriiin 

journalists and writers. 

In a bid to clieck Hungary’s 
economic reversals, the party 
has announced a new ’socio- 
economic programme * of aus- 
terity measures and economic 
reforms which are to be adopt- 
ed this autumn. Understands-; 
bty, Hungarians are l es s than 
enthusiastic about them.To 
sw e et en their acceptance, the 
parly says it wants to democra- 
tise public life ftutlker and al- 
low citizens to ’participate 1 in 
the decision-making pro- 
cess. This is in the wake of last 
year’s decision to allow the 
election of company managers 
and to allow citizens to chose 
from more than one party -ap- 
proved candidate HwHwg the 


•:rA: •' 


1985 elections. 

In its attempt to gain popular 
support for the new austerity 
measures, the party lias even 
taken to criticising neighbour- 
ing Romania openly, over the 
Cate of tiie nearly 2m ethnic 
Hun garians in Romania who 
are allegedly subjected to mas- 
sive discrimination. 

This however is no longer 
enough to assuage the Hungari- 
an leaderships’ domestic critics 
(not to be confased with the ac- 
tive opposition which numbers 
only a few dozen members ) 

They argue that the economic 
reforms begun in 1968 to reduce 
the role of central planning and 
to increase company autonomy 
were designed to ’depoliti- 
cisethe economy, while main- 
. tabling strict party control) 


^rZ^'&rr.- 


The critics note that the polit- 
ical changes since 1956 -the 
opening of the borders for trav- 
el to tile West, increased legal 
security for citizens and a freer 
flow of information- were never 
institutionalised What is 
needed, they insist, is an insti- 
tution to express the Teople's 
Will’ of the narrow dia- 

logue between the party leader- 
ship and its officials aimed at * 
calculating * the people’s inter- 
est and not representing them. 

The feet that such views were 
recently discussed in the Buda- 
pest economic weekly, Oetlet, 
shows how advanced Hungary is 
politically compared with most 
of Eastern Europe. But the lead- 
ership is still extremely sensi- 
tive about calls for political 
change from within the party. 


Politics: challenging the doctrine 
of gradualism 

Profile-* Mr Karoly Grosz, 
Hungary's new Prime Minister 
Joint Ventures: more companies 
take the plunge 2 

Foreign Trade: falling world 
agriculture prices hit export 
earnings 


At local party meetings, mem- 
bers openly criticised the polit- 
bureau for not discussing the 
recent top personnel changes 
with them. Senior party fonc- 
tionaries though are deter- 
mined not to allow a debate on 
grass-roots democratis&tion of 
the party's autocratic structure 
such as took place in Poland six 

years ago. 

Nervousness, over pressure 
for radical reforms from within 
the party was also behind the 
recent ham-fisted attempt to 
close down the financial re- 
search institute, of the Ministry 
of Finance. It produced a pro- 
gramme, to liberalise Hungari- 
an economic and political life 
which was drafted by top econo- 
mists and social scientists, 
many of them party members. 
Eventually though an amended, 
version of the proposals was' 
published in an economic jour- 
nal over the objections of party 
conservatives. 

The leaderships’ latest pack- 
age of austerity and reform 
measures emerged only after a 
protected debate within the 
Central Committee over the 
pace needed to overcome a de- 
teriorating economy and to re- 
vive long dormant reforms. The 
main Issue was bow quickly to 
reduce debilitating company 
and consumer subsidies while 
lowering taxes on profitable 


1 system and introducing wage 
differentials. The need to slash 
a spiralling budget deficit was 
less controversaL 
j Significantly, all these re- 
I forms, although set out as goals 
| since 1968 were never carried 
loot because of fear of the reper- 
cussions. While the 1968 reforms 
radically altered agriculture 
and the retail sector they left 
industrial companies virtually 
untouched. 

The word reform means noth- 
ing to company managers ’one 
Hun garian economics official 
remarked with characteristic 
frankness. ’ What counts is 
whether they get orders from 
above or not.' T hey d o,frequent- 
]y via senior HSWP officials in 
their region who actively lobby 
the Politbnreau to intervene In 
managerial affairs. 

Essential restructuring of in- 
dustry, the party now admits, is 
not going to take place unless 
the subsidising of loss-making 
companies with tax revenues 
from profitable ones is halted. 
These subsidies are to be cut by 
up to 25 per cent annually while 
taxes on profitable firms are to 
be sharply reduced. Although 
the loss-making companies are 
unlikely to be helped by Hunga- 
ry’s new profit-oriented com- 


Banklng and Finance: big 

changes introduced to try to foster 
efficiency 3 

Tourism: Budapest shows a zest 
forfiving 

Agriculture: diversification 

becomes essentia) tor survival 4 


menial banks, it is feared that 
the Government may step in to 
rescue weak companies directly 

by classifying them as 'essential 

V 

Several loss- makin g compa- 
nies, for example, hint darkly 
that, without subsidies, they 
cannot produce the railway cars 
and machinery which are ex- 
ported to the Soviet Union and 
other Comecon countries in re- 
turn for vital energy and raw 
materials which in the absence 
of a convertible currency Hun- 
gary cannot buy in the West 

Despite the much heralded 
1986 law on bankruptcy, only 
three companies were actually 
liquidated in the first half of 
this year. The Hungarian Cham- 
ber of Commerce however fore- 
casts a sharp rise in bankruptcy 
proceedings, if not liquida- 
tions, when the Government be- 
gins to withdraw subsidies on a 
large scale. 

The man in the street mean- 
while is for more worried about 
the effect of the planned value 
added tax and the new personal 
income tax for wage earners, es- 
pecially on income earned from 
second and third jobs. 

Wage earners see themselves 
at a particular disadvantage 
compared with private entre- 
preneurs who drive expensive 
Western cars and who, until 


more than nominal taxes. 
Government however must be 
careful not to strangle the pri- 
vate initiative which has con- 
tributed greatly to the prosperi- 
ty of the last 15 years. 

Government statistics' show 
that 16 per cent of national in- 
come (GNP)minns services, 
comes from private tradesmen, 
-household form plots and small 
worker co-operatives which 
lease equipment from state 
companies. Other estimates say 
one third of national income is 
derived from the non-state sec- 
tor 

Hungarian workers especially 
the 25 per cent on fixed incomes 
may easily be further embit- 
tered by the reforms next year 
when the consumer price index 
is set to rise by well over ten per 
cent (EL5 per cent this year ) as a 
result of taxation and price in- 
creases. 

Some workers also face the 
prospect of temporary unem- 
ployment as companies ration- 
alise in response to reduced 
subsidies. Nearly half of the 
4JOOO workers from the Ozd 
steelworks who lost their jobs 
this year are being deployed 
elsewhereBut as a rule, labour 
is highly immobile. 

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14 


Financial Timas Friday September 11 1987 


Politics 


Challenging the 
doctrine of 
gradualism 


MR JANOS KADAR, Hungary’s 
leader for thiry years, is facing 
his toughest leadership test 
since he assumed power in the 
dark days of November 1956. 

It is one of the most bitter iro- 
nies or all that he now faces 
calls for many of the changes 
his predecessor, Mr Imre Nagy, 
tried to institute and died for. 
Influential sectors of the intelli- 
gensia and media are calling for 
widespread democratic re- 
forms. 

The changes sought are not 
superficial or cosmetic. Intelli- 
gent and brave men and women 
are seeking radical solutions to 
the country’s economic crisis 
and they are coming up with so- 
cial democratic remedies which 
challenge the long established 
doctrine of gradualism associ- 
ated with Mr Kadar. 

There are calls for a free 
press; an active and account- 
able Parliament; independent 
governmental institutions out- 
side the day-to-day control of 
the Hungarian Socialist Work- 
ers* (Communist) Party; greater 
property rights; a re-evaluation 
of the country’s trading rela- 
tionship with Comecon and 
greater integration with the in- 
dustrialised West - to name but 
a few. 

Intriguingly, but not surpris- 
ingly, these calls are being 
made from within the Commu- 
nist Party. As one party member 
said: "We have learned the les- 
son of Solidarity'. That lesson 
was that no Communist Party 
will tolerate an Institution out- 
side itself which competes for 
political power. According to 
this view, the Party’s "leading 
role*, or domination of political 
life, is sacrosanct 

The understanding of this has 
lead many would be dissenters 
to join the party. It is now prob- 
ably one of the broadest 
churches in the Communist con- 
gregation (encompassing barely 
reconstructed Stalinists at one 
end and liberal social demo- 
crats at the other) and is a mat- 
ter of no small pride to those in 
its upper echelons. 

The tensions this generates 
may well be acted out in this 
month’s meeting of the Central 
Committee which is required to 
discuss the future of the party’s 
"leading role' in Hungarian so- 
ciety, economy, and polity. More 
than ever, though, the conflict is 
present in the debates concern- 
ing economic reform - a very 
pressing issue which Mr Karoiy 
Grosz, the Prime Minister, is ex- 
pected to address openly in this 
month's three-day parliamenta- 
ry session. 

Mr Grosz, 56, faces one of his 
toughest political challenges to 
date. He is a member of the Po- 
litburo, but as Prime Minister, 
be has public responsibility for 
the economy. It is a measure of 
Hungarian politics (the reading 
of which is not unlike divina- 
tion by the inspection of a goats 
entrails) that no one is quite 
certain whether be was given 
the job to succeed or to toil. 

In Budapest, few observers 
are wholly confident that he has 
the mettle to attack the job with 
the necessary vigour. Mr Grosz 
is not noted for his reforming 
zeal, but more for his ambition. 


He is an artful politician who 
clearly wants to succeed Ur Ka- 
dar as general secretary of the 
Party. The hope amongst Hun- 
garian reformers is that Mr 
Grosz might decide that his best 
chance to secure the succession 
is by whole-heartedly embrac- 
ing a reform platform. 

In the wings is Mr Janos Be- 
recz, 56, a member of the Polit- 
buro and a secretary of the cen- 
tral committee, who has no love 
for Mr Grosz (the antagonism is 
mutual! much less for economic 
and political reform. He is the 
central committee chairman of 
the party's agitation and propa- 
ganda committee, the man in 
charge of disseminating the 
party’s line to the faithful for 
propagation amongst the un- 
elect. 

It was Mr Berecz who, earlier 
this year, intervened rather 
hamfistedly when the Writers’ 
Union failed to elected a major 
ity of party members to its gov- 
erning council, and who, in May, 
was thought to be behind moves 
to close the Ministry of Fi- 
nance's Institute of Financial 
Studies. This was after the Insti- 
tute collaborated in the writing 
of a radical pamphlet on eco- 
nomic and political reform. 

Although there are few signs 
of a mass opposition to the Par- 
ty. especially at an institutional 
level, the reform movement is 
well organised. When the Peo- 
ples' Patriotic Front - an organi- 
sation outside the formal struc- 
ture of the Communist Party but 
staffed and led by Party mem- 
bers - produced its programme 
for reform of the Hungarian 
economy called "Change and 
Reform' it shocked the conser- 
vatives in the party. 

This was partly due to the rad- 
icalism of the treatise's recom- 
mendations. Although the au- 
thors’ analysis of the causes of 
Hungarian economic decline 
were widely understood, the so- 
lutions proposed were predi- 
cated tzpon the creation of a civ- 
il society, where the rule of law 
determines economic and so- 
cial policy, not Party Cat 

Also, what worried the au- 
thorities was the declarative 
style of its writing (It is above 
ail else a manifesto for change) 
and the fact that it was not just 
the product of one or two bright 
economists, but the consensus 
view of more than 100 leading 
economists and social scientists 
who occupy senior positions 
throughout Hungarian govern- 
ment, academia, and above all, 
the Party. It had the quality of a 
movement, and that is what Mr, 
Berecz, and other Like-minded 
party executives, feared and- 
disliked most 

In another recent display of 
independence from Party ortho- 
doxy, a group of 22 Hungarian 
journalists called on the Party 
to withdraw from involvement 
in the media. The 11 page "Pro- 
posal for Media Reform" argued 
that Hungarians were being fed 
false information concerning 
the depth of the country’s eco- 
nomic crisis. 

The journalists called for rad- 
ical changes to the operation of 
the media. These included free- 
dom of the press, non-interfer- 
ence by the Party, and the en- 



( HUNGARY 2 ) 

L eslie Collitt profiles Hungary's new PM 

A rare personality 


actment of a civil law defining 
the limits of press freedom (that 
is, what constitutes state se- 
crets) which would make the 
press answerable only to an 
elected Parliament 

The political strength of the 
"movement* remains to be 
tested. Perhaps this month’s 
meeting of the central commit- 
tee will provide a clue or guid- 
ance, but any realistic appreci- 
ation of politics in Hungary 
would necessarily lead to the 
conclusion that those with pow- 
er will try to get the most eco- 
nomic reform for the least loss 
or compromise of their political 
power. 

The foundation of Mr Kadar's 
reign - much more than crude 
repression - is a tacit compact 
he has had with Hungarians 
since the Soviet invasion in 
1956. He has promised them, 
and mostly delivered, rising 
standards of living and a degree 
of personal liberty only 
dreamed of in other Eastern Eu- 
ropean countries. People in 
Hungary do not fear a knock at 
the door anymore. 

Another constituent of this 
compact is gradualism, of 
change slowly through time. In 
this, Mr Kadar was aided by an 
atrophied leadership in the 
Kremlin. "Remember 1956" was 
a convenient break on those 
who wanted to move faster than 
Mr Kadar, for whatever reason, 
was prepared to do. 

The price of this has been the 
acceptance of the hegemony of 
the Communist Party and a slav- 
ish adherence to the foreign 
policies of the Kremlin. And 
grudgingly people were pre- 
pared to accept it They know 


what life In the rest of Eastern 
Europe Is like. 

But time has run out; the age 
of gradualism is over. The Hun- 
garian economy is in a sham- 
bles and in need of urgent eco- 
nomic, and some would say, 
comprehensive political re- 
form. Besides, the leadership in 
Moscow has changed; it is youn- 
ger and energetic and that 
makes it harder to play the 
Moscow "card”. 

That some form of economic 
reform is in train is in no doubt 
The banking system has been 
changed to encourage greater 
efficiency in credit allocation, 
and a reformed taxation system 
is due to begin next year. 

The qnestion remains, 
though, the extent to which the 
Party will allow the growth of 
political pluralism. The de- 
mands for this are strong within 
and without the Party, but it is a 
question of, above all else, pow- 
er. If the Party is not everything 
then what is its claim to legiti- 
macy? 

Reformers openly admit this 
is a "contradiction”, but still 
conclude that greater political 
freedom is the objective corol- 
lary of economic pluralism. In 
the light of Hungary’s recent 
history since 1968 there might 
be more than a measure of wish- 
ful thinking here, bnt their view 
that the settlement of the coun- 
try’s economic ills requires 
more autonomy in economic de- 
cision-making, the creation of a 
parliament with real legislative 
authority in its own right, and 
the need for greater private 
property rights, is persuasive. 

Simon Hotttefton 



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The new Prime Minister of Hun- 
gary, Mr. Karoiy Groszjstands 
out as a rare and colourful per- 
sonality among the grey ranks of 
East European politicians. 

The former printer and politi- 
' cal officer in the post-war Hun- 
garian army is a leading con- 
tender to succeed 75 year-old 
Mr Janos Kadar as Head of the 
Party. His record as Prime Min- 
ister,however, is likely to make 
or break bis chances. 

Mr Grosz^t 57,has developed 
a steely determination during a 
party career in which he was 
twice ’exiled'by the leadership 
to the Province&Eacb time he 
returned to Budapest with his 
reputation as a doer enhanced. 

He will need toughness in or- 
der to slash subsidies to loss- 
making firms and to implement 
thfe rest of the new reforms and 
austerity measures which are to 
be adopted this month- As few 
other members of the Hungari- 
an polit bureau he understands 
the corrosive relationship be- 
tween the party’s economics of- 
ficials and the managers of 
Hungary's leading companies, 
whether he can turn a deaf ear 
to lobbyists seeking favours for 
Hungary’s, inefficient compa- 
nies will be crucial to the re- 
forms. 

As a former party secretary 
for Hungarian radio and tv in 
the 1960s, and head of the ’Agita- 
tion and Propaganda Depart- 
menfof the Central Committee 
in the late 2960s and 1970s, Mr. 
Grosz understands and is able 
to use the media to his own ad- 
vantage's main rival for the 
top parly postal 57 year old Mr. 
Janos Berecz, as the Central 
Committee Secretary for Infor- 


mation, is headmaster of the of- 
ficial media.He is also as un- 
bending as Mr Grosz about the 
Party’s commanding role in po- 
litical and economic life. 

But while Mr Berecz's public 
image is that if a rather dour 
ideologist Mr Grosz is animated 
and remarkable outspoken.On 
his recent return to Budapest, 
from his first trip as Prime Min- 
ister to Moscow, where he con- 
ferred with Mr. Mikhail Gor- 
bachev ,Mr Grosz gave an 
unusual off the cuff interview to 
Hungarian tv on the results of 
the visit 

Mr Grosz is in fact the closest 
thing Eastern Europe has to a 
populist-He has been highly 
critical of the stagnating re- 
forms putting the blame frilly on 
the leadership which of course 
included hims elf. But the criti- 
cism implied that Mr. Kadar 
was largely at fault, for failing 
to press forward with the re- 
forms. On Hungarian tv last 
May, Mr Grosz also said public 
opinion had grown critical of 
the leadership because of de- 
clining living standards (which 
he as Prime Minister will now 
have to cut even forth erjand as 
a result of the'weakness*of the 
information the authorities 
were giving to the people. This 
was a direct body punch at Mr 
Berecz who is responsible for 
information policy. 

Underscoring the complexity 
of the man Mr. Grosz added that 
in the present economic climate 
the Voice of the opposition 
gains strength * This was nei- 
ther harmfm nor hostile, he ad- 
ded, to the (peat surprise of 
many Hungarian interUectuals 
who regard both Mr. Grosz and 


Mr. Berecz with dismay. Mr. 
Grosz noted that the opposi- 
tion’s criticisms contained ele- 
ments which were ’instructive, 
worth using; and to which a gov- 
erning party must pay attention. 

Needless to say^enior mem- 
bers of the leadership in East- 
ern Europe normally do not ut- 
ter such sympathetic sounding 
views about opposition .Neither 
do they admit,as Mr Grosz did 
last year, that he nearly left the 
Party after the 1956 uprising 
when he was wrongly accused 
by party officials of giving in to 
the insurgents 

Despite such candour, knowl- 
edgeable Hungarian politicians 
claim the new Prime Minister is 
too demagogic to succed Mr Ka- 
dar -At the same time, they also 
rule out Mr Berecz whom they 
call a 'firm ideologist’ who is 
unable to get across his mes- 
sage to the public: 

Mr Grosz’s dilemma is that, in 
order to succeed Mr Kadar, he 
will have to move foster on im- 
plementing the new reforms 
than Mr Kadar is likely to toler- 
ate But to do this he must have 
the backing of the ruling Hun- 
garian politbureau and, equally 
important, Mr Gorbachev. Mr 
Kadar however has packed the 
politbureau with like-minded, 
elderly gradualists as well as 
younger men who owe their loy- 
alty to him. Mr Berecz who was 
appointed to the Polit Bureau 
only last June can be counted 
.upon to apply the breaks to any 
undue baste by Mr Grosz. As for 
Hr. Gorbachev, thus Car he has 
refrained from interfering in 
the. political leaderships of his 
East European allies and pre- 




s- . jbcw'-w* • 

Mr Karoiy (frosz: a reputation as 
a doer 


formed to remain neutral 

Mr Kadar’s recent promotion 
of Mr. Grosz to the Prime Minis- 
tership and Mr. Berecz to the 
Politbureau is in the tradition 
of Government and party re- 
shuffles which Mr. Kadar has 
repeatedly used in order to de- 
ny a power base of any potential 
successor to him. 

Something however has 
changed in Hungary in recent 
months. Hungarian officials who 
flavour greater urgency on the 
reforms refer to Mr Kadar as a 
’weary old man 'who has run oul 
of ideas and is note isolated in 
the ’White House,* the central 
committee building overlooking 
the Danube A1 though Mr Ka 
dar’fl reputation among or dr 
nary Hungarians remains in- 
tact, both his own party 
ftmctianaries and Government 
o fficials speak of him as if there 
is no denying that Ihe Emperor 
has no clothes. 


Joint Ventures 


More companies take the plunge 


(ECONOMICS OFFICIALS in Bu- 
| da pest have a vision of Hungary 
•becoming so attractive to West- 
ern businesses that it will pull 
jin large amounts of capital into 
■joint ventures with Hungarian 
companies. 

However, when Western eom- 
jpanies consider setting up a 
joint venture in Hungary - or 
any other Comecon country - 
they think first of gaining access 
‘to other Comecon markets. For 
■'the foreseeable future at least 
■such prospects are dim. 

Western companies investing 
■'in Hungary are .unable to sell . 


tered by Western companies 
are related to inadequate infra- 
structure, in particular over- 
burdened telephone lines to the 
West. 

On. the other handjolnt ven- 
tures are a two-way business 
and, uptil now, their growth has 
also been inhibited by the foct 
that the Hungarian partners in 
any joint venture nave been 
highly taxed, an anomoly which 
is due to be removed under the 
proposed new tax reforms. 

West German companies are 
the most numerous partners in 
joint ventures, as befits Hunga- 
ry's leading trading partner, fol- 


ithe products or services they 

iproduce in Hungary to other Co- lowed by Austrian companies, 
■mecou countries. The situation . _ m „ 

is not likely to change until the Among the West Germans are 
■Soviet rouble becomes convert- S’ 1 ® * 1 ^Siemens, BASF 

ible within Comecon and until Quelle but also smaller 


realistic exchange rates are es- 
tablished between Comecon 
currencies. 

In the meanwhile, they have 
to make do with the Hungarian 
market of 10.6m consumers. 


companies like Adidas and 
Schwarzkopf One of the biggest 
joint ventures is with Standard 
Elektrik Lorenz, the West Ger- 
man subsidiary of ITT, which 
joined up last year with Ska la- 


in the fifteen years since joint p9,°P’ Hungary’s aggressive re- 
ventures have been legally fea- tefiev and trading house, to 
sible nearly 100 Western com- a companycaUed Selec- 
ipanies have tahw th e plunge tjoiiik with a working capital of 
and joined forces with a Hun- 0111 2Qn LT h * Hungarian compa- 
garian partner. More joint ven- contributed 65 per cent in 
tures however have been set up form of buddings, services 
in the last 15 months than in the ®od cash while Sei provided 
previous 15 years. This is the re- production facilities, licence^ 
salt of new legislation provid- technological know how and 
ing for a maximum corporate components to produce colour 
tax of 40 per cent of gross prof- arK * ^deorecorders. 

its, and 20 per cent in the first some 40,000 TV sets 

five years, for joint ventures in 5,000 video recorders are to 
certain key areas such as elec- 5® produced, mainlyfor sale in 
Ironies, hotel construction, and Hungary. Sm, bowera*, hu 
packaging technology. A five committed itself to find West- 
year tax holiday is also offered markets for the output m 
to individual companies Hunga- coining years. so that the Hun- 
ry is particularly anxious to at- Syrian gover nm ent will not lose 
tatet hard currency on importing 

Another improvement for Western components. 

Western companies is that the I One of only two joint ventures' 
licensing of a joint venture has with UK companies is Walton 
become a one step procedure Computers (whose parent com- 
aud gaining foreign trade rights pany is Walters International), 
has been greatly simplified, set up in 1984 with Videoton 
The previous requirement that which holds 51 percent The 
the Hungarian partner must joint venture produces matrix 
hold s majority in the joint firm printers and printheads and 
has also been eliminated. The has a working capital of Forints 
main problems still eneoun- 25m ($500,000}. 


Mr Benedek Tallai, managing 
director of the joint venture, 
said he had a turnover last year 
ol Forints 90m (three times the 
previous year), and profits of 
Forints 23m (Forints 500,000 In 
1965): The company had a small 
-surplus in hard currency, an im- 
portant foct to tiie government 
as it shows it is not a drain on 
Western currencies. Watters re 
invested nearly all the earnings 
back into the joint venture com- 
pany. Mr Tallai wants to start 
manufacturing in Hungary, in- 
stead of buying in components 
from Hungarian firms, in order 
to reduce the firm's taxes to ze- 
ro. 

He says UK companies are 
slow to form joint ventures in' 
Hungary, largely because they 
take a shorter term view on 
profits than German and Austri- 
an companies. From his experi- 
ence though, the lifetime of 
Walters’ products has been ex- 
tended by being able, to sell 
printers in Hungary which it 
could not have sola in the West 

Mr Tallai however does not 
believe that Hungary will be 
able to attract a great deal more 
Western capital into joint ven- 
tures until such tie-ups become 
more attractive for Hungary’s 
own companies; that is, until 
the proposed new fiscal reforms 
are actually introduced. 


To date.the largest Western 
joint venture is Citibank-Bu da- 
pest which has a working capi- 
tal of Forints lbn, 80 per cent of 
Which Is in the hands of the US 
bank. Foreign ownership can go 
up to 99 per cent Earlier this 
year a joint venture was set up 
with the Japanese biotechnolo- 
gy company Kyowo Hakko and 
the trading house Toyo Henka 
which took a 20 per cent share 
in a joint venture factory to pro- 
duce amino adds for animal 
fodder. Another 15 per cent was 
taken by the International Fi- 
nance Company, the subsidiary 
of the World Rank, and the re- 
mainder by Hajdusaj, the Hun- 
garian. agricultural co opera- 
tive. Their joint firm has been 
capitalised at $18m bnt Hungar- 
ian sources say $45m will even- 
tually be invested. 

A breakthrough into Eastern 
Europe was achieved by 
McDonalds, the American fast 
food restauranteur, recently 
through an agreement with 
Hungary’s most successful agri- 
cultural company, Babolna, 
which is to provide most of the 
raw materials. Under the joint 
ventured McDonalds 'eateries’ 
are being opened in Budapest 
which, until now at least, has 
been the culinary capital of 
Eastern Europe. 

Leslie Collitt 


ALL ABOUT HUNGARY 

Tlw National Tourism Information Office is at your service 



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ry 




X, 


Financial Times Friday September 11 1987 


HUNGARY 3 



a \ > 


S*i85* 

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;*:•• «>_=:e 

• ■..'■.re 




• r. IT-. 


>:■ • 




fc/Aii! 


balance of bad? 
jnhaftf cur rency 


frt hard currency 


Foreign Trade 


plus 5303 mfflon iwfaa « S4 40 mnHon 
ntimis S465 mason ' m*nu*S1.4bira©fl 


in 1985 when it stfl sold meat to the Soviet UraonfordoSars) and the 
remainderintransferBbterwbtes^otfTerreBrnbereoJComecon.lt8feade 
China and Yugoslavia is trmsaefad in hard ciffTWXy. 


% of total imports 
1975 198ft 


% of total exports 
1978 . 198ft 


Soviet Unon 
Wfest Germany 

East Germany' 
Austria • - 
Czechoslovakia 
Ptfand . 

Italy . 

Vugosiavte 

U.SA - 

Switzerland & 
Liechtenstein 

Romania 


Netherlands 


Sweden 


06 

2.3 

2.0 

- ■■■■ 1 3 

rate : 1.6 

1.2 

& Luxembourg i.l 



Banking and finance 


Big changes to foster efficiency 


Soheo: Ronttn tack nMftyantf Seem oamnUMUaMiba. 


One of Kungaiyte most soceeasftif exports: wine maturing in 
cetera at Eger (Efert Modoc Mote oo right and RfesUng and BriTs 
Blood on lefO 


Foreign trade 


Falling farm prices lift deficit 


HUNGARY IS feeing up to die 
harsh reality that, only when indus- 
try is radically restructured and 
managers are forced to compete for 
contracts abroad, will exports 
show a marked improvement. 

The statistics tell a dismal tale 
Hunguy*s share in worid exports of 
industrial products feu from nearly 
1 per cent m I960 to 0.4 per cent in 
1985. The shares of Hungarian 
made industrial goods in Coni' 
econ's industrial imports declined 
from 7£ per cent to 4.1 per c»t in 
the early 1980s because of the 
growing uncompetitiveness of. 


thms in the future are to make 
exporting more attractive for 
Hungarian companies. But the 
deterioration in Hungary’s terms of 
trade is mainly the result of the low 
value-added content of its exports 
Thus, 25A per cent of Hungary’s 
exports for hard currency last year 
were semifinished goods, 9£ per 
cent raw materials, 84 per cent 
Aids and electric energy and only 
1&6 per cent machinery and 1&6 
per cent manufactured goods 
which included a large quantity of 


" External factors” have, no 
doubt, played a rote in the growing 
hard currency trade deficits since 
1985. -Falling world prices for 
agricultural products directly hit 
Hungarian food exports while 
Third World markets for Its goods 
dried up. To make matters worse, 
the Soviet Union stopped paying 
for Hungarian meat- with dollars 
and now pays with energy delhrer- 
ies Only a few years ago, Hungary 
was earning SSOOm annually from 
hard currency exports to Moscow 
which covered the deficit in its 
trade with the West. 

An 8 per cent devaluation of die 
forint and more frequent devaloa- 


countries was 46 per cent of its 
total export to them. 

.. While exports in dollars 
increased 21 per cent in the first sbe 
months of this year, imports in 
dollars rose 8 per cent tt is difficult 
to say how much of the gain in 
exports can be attributed to low 
interest credits and the competiti v e 
bidding system begun last year and 
how much is the result of greater 
exports of low value products. 
Agricultural exports at any rate, 
which make up one4hird of the 
total, are not growing and there is 
little prospect for improvement in 
die next few years Hungary wants 
to substitute imports from Com* 



econ for Western import s w here v er 
possible but is finding this difficult 
because of the inflexibility of Com- 
econ’s trading mechanism. 

It had been hoped that giving 
more companies the right to con- 
duct foreign trade would lead to 
mom aggressive exporting. But in 

practice too many of the companies 
simply took existing exports sway 
from each other without generating 
new business. 

The high import propensity of 
the Hungarian economy wiD be tflf- 
ficolt to reduce as many export 
industries such as doming and 
dues are largely dependent upon 
Imports from the West of every- 
thing from machinery to raw mate- 
rials. Establishing industries to 
meet these requirements will 
involve investments in resources 
which Hungary does not have at 
present. Its hopes are therefore 
pinned on joint ventures with West- 
em companies which can supply 
capital and knowhow. 

Phasing out suhahfi wi to faeffr- 
ctent producers and letting prices 
reflect real costs are supposed to 
make Hungarian- companies turn 
their attention to foreign markets. 
In the short tom, however, indost-* 
rid restructuring may produce a J- 
curve effect in which exports 
would fell before rising according 
to Mr Tiber Antatpeter, direc t o r 
general of the Ministry of Foreign 
Trade — exports with a low vatoe- 
addedjtoutentwouki.be efirpinated*, 
whOe new products, wifh a higher 
value-added wmtpnt would not yet 
be produced. 

Restructuring would also affect 
Hungary's trade with Comecon. If 
railway cars, for example, woe no 
longer exported to toe Soviet Union 
then Hungary would not get the 
equivalent import which is 
obtained for railway cars. This 


the rise in foreign debt and the 
need to develop more sophisticated 
products to sell to the West Low 
price e xport s of textiles and clo- 
thing, for example, are a consider- 
able source of hard currency 
revenue but Hungary is engaged in 
cut-throat competition with the 
Third World in this lower end of the 
market ft would be more advan- 
tageous* to concentrate on using 
Hungarian materials and designs, 
but more *wiu»ni» 

Nearly 40 per cast of Hungary's! 
hard currency trade is conducted 
with the European Community so 
that Budapest ims tong been eager 
to reach a bilateral arrangement on 
trade and co-operation with the EC. 
Formal talks began with the Euro-, 
pean Commission last June on’ 
what Hungary can offer the EC in 
return for greater access to the 
Community for its goods. As a 
result of restrictions on Hungarian 
agricultural exports to EC coun- 
tries the share of agricultural pro- 
duce in Hungary’s deliveries to the 
EC has fallen from 58 per cent in 
1973 to 28 per cent at present 

The Community imported ECU 
3-Sbn worth of Hungarian goods 
last year, mainly agricultural ami 
manufactured goods. It exported 
ECU 245bn in products to Hun- 
gary, mostly machinery, transport 
eq u i pm ent and other B MBBfe ctm aa 
As the only Comecon country, 
apart from Bulgaria, which does 
not manufacture its own cars, Hun- 
gary should bea natural market fix* 
EC carmakers. 

In feet, with hard c ur rency very 
scarce, Hungary has a problem 
satisfying domestic demand for 
cam. Talks with Opel in West Ger- 
many, involving deliveries to Gene- 
ral Motors of running gear pro- 
duced by SABA engineering cam- 
*- return for car deliveries 


"FOR TOO LONG people have 
wanted to make Marx and Lenin 
into gods,' says Mr Sandor 
Demjan, 44, the outspoken 
chairman and chief executive of 
the Hungarian Credit Bank 
<HCBX the biggest of Hungary’s 
newly-created commercial 
banks. 

Hr Deny an is more practical. 
If he quotes the ancients it is for 
guidance in the real world of 
credit allocation. As he points 
out it was Lenin who said *to all 
according to their work perfor- 
mance”. 

”We lend money to those com- 
panies which make money,” he 
says. ”If we consider they have 
good- prospects for develop- 
ment, that they are competitive 
both at home and abroad, then 
we will do business with them 
If not, we will put them into re- 
ceivers bip.* 

This is the new voice of Hun- 
garian banking and finance. Its 
expression ha s been pos- 
sible by a significant structural 
change to the country’s banking 
system which came into effect 
on I January this year. 

In a one-shot big bang, Hunga- 
ry moved to modernise a bank- 
ing system which, for the past 40 
years, had remained largely un- 
changed, elephantine, and inef- 
ficient. Credit for industry was 
in the hands of the National 
Bank of Hungary (NBH) - an in- 
stitution which performed this, 
along with all of the fonctions 
associated with a central bank 
- and a number of specialised 
and, by comparison, any indus- 
try hanks. Longer- term finance 
for Industry was also doled out 
by the State Development Bank 
CSDBX 

(The household savings of the 
nation were gathered by the Na- 
tional Savings Bank and two 
cooperative banks. These insti- 
tutions provide finance largely 
for the private housing market 
and for central government def- 
icit financing, markets which 
are still to await liberalisation.) 

In essence, the changes an- 
nounced last year, and put into 
effect on 1 January, split the 
commercial banking activities 
of the NBH and some of the in- 
dustrial financing work of the 
SDB into five separate operat- 
ing companies. In so doing, they 
have created a commercial 
sector. This necessi- 
tated tiie creation of three new 
banks - HCB, the Commercial 
and Credit Bank, and the Buda- 
pest Bank * and the revamping 
ef two other small hanks found- 
ed in the 1950s - the Hungarian 
Foreign Trade Bank and the 
General Ranking and Trust 
Company. 

The effect of this is to create a 


two-tier banking system, with 
the NBH assuming the role of a 
central bank. It now acts as the 
bank of issue, the government’s 
fiscal agent, and the govern- 
ments agent in the application 
of monetary policy. It is also the 
bank which raises loans on the 
international capital markets, 
and liaises with the Interna- 
tional Monetary Fund and the 
World Bank. 

The rationale behind the 
changes to the banking system 
has been to foster greater effi- 
ciency in the allocation of cred- 
it, and, by "miring the commeri- 
cal banks profit-responsive, 
make them a significant agent 
for structural change in the 
Hungarian economy. It b”* 
been a significant step down the 
road towards monetisation of 
the Hungarian economy. 

A number of other develop- 
ments which occured earlier 
than this can also be included 
in the broad category of bank- 
ing reform. These are the en- 
couragement of foreign partici- 
pation in the Hungarian 
banking system, and the cre- 
ation of specialised banks for 
the ecouragement of new indus- 
trial development in the coun- 
try. 

In 1979, the Hungarian au- 
thorities permitted the creation 
of the Central European Inter- 
national Bank, which is 66 per 
cent foreign-ownedLBut 
bank was permitted only to con- 
duct foreign business. It took 
until last year for the authori- 
ties to recognise the benefits of 
greater participation in the do- 
mestic hawking environment. 

The authorities allowed Citi- 
bank, In December 1985, to own 
a majority stake <80 per cent) of 
a domestic bank, and also en- 
couraged the formation of joint 
venture banks, such as Uoic- 
bauk (founded in 1988 and 45 
per eent foreign-own ed), and 
the creation of banks with a spe- 
cial brief for the finance of new 
industries, such as the Techno- 
va Industrial Development 
Bank (founded in 1988). 

On the commercial banking 
side, the NBITs commercial 
banking department was split 
unequally into five separate 
Quits. Corporate customers 
were awarded to the various 
banks, and, for the first six 
months of this year, no predito- 
ry competition was allowed. 
Since July, the banks have been 
able to compete for customers, 
and, in theory, jettison old ones 
or refuse new ones. 

The biggest commercial bank 
by for is the HCB. Its client list 
of 2£00 customers accounts for 
about 50 per cent of Hungary’s 
GDP - 80 per cent of the indus- 


trial sector, 30 per cent of the 
agro industry sector, and 40 per 
cent of trade, transport and ser- 
vices. The other four banks 
have the rest of the market, and 
some have special functions, 
such as the Budapest Bank 
which has the prime responsi- 
bility for the operation of the 
bond market 

Hungarian bankers sow 
speak the language of unrecon- 
structed capitalists, and the au- 
thorities, specifically the Com- 
munist Party, seem to have 
given them the freedom to act 
on their instincts. One of the 
first decisions of Mr Demjan at 
HCB was close down a state run 
construction company in the 
city of Veszprem. 

The company conersed had 
had its capital replenished in 
three of the first six years of 
this decade. *We felt it was bet- 
ter to lose some money now. 
than lose a lot more in the fix- 
ture,* Mr Demjan said. ’Our pol- 
icy is to get rid of the loss-mak- 
ing companies, and let them go 
bankrupt, and use of capital for 
more efficient companies.* 

"There were many polemics 
and discussions, but the law left 
it to us to decide. We didn't talk 
to the central committee of the 
Party; our board of directors de- 
cided it 

■Politicians supported us - 
they had passed the law - and 
the Ministry of Finance under- 
stood our position. In bureau- 
cratic places we were fought, 
and the trade unions com- 
plained, but the decision was 


covering that they can provide 
short-term loans to others and 
each other instead of depositing 
their surplus cash in non-inter- 
est bearing accounts. But there 
is a long way to go before the 
Hungarian banking system 
takes on much resemblance to 
its counterparts in the West 

Old habits also die hard, espe- 
cially when there a few insti- 
tional constraints. According to 
Hungarian economists and 
Western diplomats, ties to the 
Party are still important in the 
determination of credit alloca- 
tion. A company peopled by se- 
nior executives with good polit- 
ical credentials will always be 
able to gain access to subsidied 
finance; white a bank with the 
same credentials will also be 
able to use its refinancing facil- 
ity with the NBH. 

Also finance is still very much 
tied to national aims. Predomi- 
nant amongst these is the need 
to increase hard currency earn- 
ing exports to the West Echoing 
most senior executives in bank- 
ing, Mr G I Pazmandi, the man- 
aging director of Technova, 
says: 'naturally, companies 
which can export their produc- 
tion will be given preference; 


Lion will be given preference; 
that is natural under the cir- 
cumstances." 

But the effects of competition 
between banks are beginning to 
percolate through the system. 
Companies have b£gnn to shop 
around to see what financial 
services the banks now offer, 
and some enterprising banks, 
such as Unicbank, have begun 
to hold seminars in Budapest 
for companies to show teem 
their wares 

The introduction of foreign 
banks has begun to have an in- 
fluence - aside from Citibank’s 
influence in the market place, 
Unicbank’s Austrian sharehold- 
er, GennossenschaftUche Zen- 
tralbank AG, processes tee 
banks customer accounts, there- 
by giving it a sophisticated data 
processing capability - and tee 
Hungarian banks are looking to 
place some staff abroad for 
training in the ways of Western 
banking. 

Foreign bankers and diplo- 
mats believe there is a lot of 
pent-up talent waiting to be let 
loose in the Hungarian finan- 
cial community. At present it is 
being held back by formal and 
informal institutional re- 
straints, tee breaking down of 
which would require the NBH 
to achieve true institutional in- 
dependence and being to be- 
have like a real central bank, 
and for preferential treatment 
on the basis of Parly connec- 
tions to cease. 

Simon Hotberton 


But while bankers in Buda- 
pest have clear ideas about as- 
set management, on tee liabili- 
ties side of the balance sheet 
the situation is a little more an- 
tiquated. The NBH operates a 
refinancing facility for banks on 
the basis of their capital base 
and attempts to control the 
growth in credit by placing res- 
tictions on the banks' access to 
this facility. 

Money markets are in their in- 
fancy. At present there are 
fledgling inter-bank and inter- 
company markets, but they have 
barely developed. When Citi- 
bank commenced operations in 
early 1986 there were no inter- 
est bearing deposits shorter 
than six months: 

One of the things it has taught 
Hungarian companies and oth- 
er banks is the time value of 
money, *We introduced a new 
product to the market,' says Mr 
Anthony Fekete, the bank’s cor- 
porate banking head, with a 
laugh, "the three month interest 
bearing deposit.' 

According to Mr Fekete, com- 
panies and hanks ate DOW dlS- 



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HUNGARY 





16 


Financial Times Friday September 11 1987 


( HUNGARY 4 ) 


Tourism 


Budapest shows a zest for living 


EVEN THOUGH Hungary is 
being inundated by tourists 
from East and West, it has the 
capacity to absorb them without 
suffering irreparable damage. 

Hungary has always been a 
Central (not East) European 
crossroads and is used to 
foreign visitors. This is espe- 
cially true of Budapest and 
nearby Lake Balaton where 
most tourists congregate. 

Although they have a reputa- 
tion of being a prou d pe ople, 
Hungarians are extremely 
adaptable and keen to please 
The standard of service in 
Hungarian hotels and 
restaurants— despite years of 
Socialist neglect— is well above 
that in most East European 
countries and is often superior 
to that in the West 
Whether one stays at the de 
luxe Forum or Hilton hotels or 
the four-star Royal in Budapest, 
the staff is efficient and cour- 
teous. Similarly, in-flight ser- 
vice is excellent on Hungary’s 
national airline, AfaJev, which 
-flies only costly-to-operate 
Soviet aircraft. Instead of the 
bland food handed out by most 
airlines on inner-European 
routes, Malev manages to pro- 
duce top quality cold dishes on 
even short hops. 

Most first-time visitors to 
Budapest are taken aback by its 
sheer urbanity and its inhabi- 
tants' flair for life. The city's 
monumental buildings are a tri- 
bute to an era not so long ago 
when Hungary stretched from 
Poland to the Adriatic Sea. The 
capital retains a cosmopolitan 
feel which is heightened by the 
contrast with nearby stodgy 
Vienna. 

This has a lot to do with the 
stylishness and trendiness of 
Budapesters which resembles 
that of the Italians. Women in 
Budapest may not have much to 
spend on their clothes but they 
look more chic than some of 
their Western sisters with many 
times the clothing budget 
In much the same way, 
Budapest is the joke-telling 
capital of Central and Eastern 
Europe, a well as being a city of 
marvellous rumours and plots. 

As a result it is not so much 
for the sights which one abso- 
lutely must see, though these 
are important as for the atmos- 
phere. that visitors come to the 
city. The best times are in the 
early spring or autumn, when 
the tourist tide has receded. 
Relax under the awning of the 
Dunacorso restaurant overlook- 
ing the Danube and Budapest 
will parade before you. 

Hungary expects to receive 
more than 5m visitors from the 
West this year after 4.1m last i 



Budapest Hilton - the standard of sendee In Hungarian hotels mid restaurants Is well above 
that In moat Bast European c o untr i e s and to often superior to that In the West 


year. The hard currency income 
from tourism was $364m in 1986 
and, after deducting expenses 
and hard currency spent by 


immensely profitable Forum 
Hotel, Budapest's new airport 
(unfortunately only Malev uses 
it), a Congress Hall in Bndapest 


native country, stay with rela- 
tives and friends in Hungary. 
Unlike other East European 
countries, Hungary does not 
require Westerners to exchange 
a fixed sum of hard currency 
per day into local forints. The 
Hungarian authorities correctly 
believe that such compulsory 
exchanges are bureaucratic and 
thus annoying to Westerners. 

Hungary plans greatly to 
expand accommodation fn pen- 
sions and homes — of which two- 
thirds are private— as well as 
camping sites. Private initiative 
in this sector is of prime import- 
ance, according to Mr CzegledL 
It is also difficult to control and 
the authorities suspect that a 
great deal of the hard currency 
which Western guests pay for 
private rooms is neither taxed 
nor enters the Government’s 
coffers. 

Most of the tourists entering 
Hungary are from Eastern 
Europe, three quarters of them 
Poles and Czechoslovaks. Many 
of the latter, however, are 
ethnic Hungarians from Slova- 
kia as well as other shoppers 
who ignore commercial 
accommodation. Poles are the 
biggest group from the East and 
have been getting a rough time 
of it from Hungarian customs. 
They have been charged a fee in 
hard currency for the goods 
which many Poles bring into 
Hungary in order to sell. 

The L3m East Germans who 
will visit Hungary this year are 
also able to afford little more 
than a camp site. Many live with 
Hungarian friends who, in 
return, stay with the Cast Ger- 
mans when on holiday. 

Of the 6 . 2 m Hungarians who 
travelled abroad last year— 60 
per cent of the population — 
900,000 went to the West Hunga- 
largest single group of Western rians are entitled to purchase 
visitors, 2.4m last year, of which $350 every three years for a trip 
1.7m were day trippers who to the West but can also travel 
shop in border towns such as annually if they pay through a 



The nettles of reform 


Hungarians in the West, $200m and to modernise border cros- Sopron. Here they frequent the travel agency or if the trip is 


was left This represented 8 per 
cent of all hard currency ear- 
nings. 

“We get a unit of hard 
currency 20 to 25 per cent 
cheaper from tourism than from 
exporting goods," notes Dr Joz- 
sef Czegledi, the new general 
director of the Hungarian Tour- 
ist Board. 

Xt is small wonder that Hun- 
gary — with few other growth 
sectors— is eager to expand 
tourist facilities. But it needs 


sing facilities. beauty parlours, dentists and paid by a friend or relative in 

A joint venture with Danish ' eye doctors which are dirt the West In the latter case they 
and Austrian companies has 


companies 

built a resort village on the pic- 
turesque Tihany peninsula 
which is regarded as a model for 
the type of facilities the Hunga- 
rians want to expand. Another 
joint venture between Hun- 
gary’s largest tour bus operator, 
Volanbusz, and Blaguss. an 
Austrian bus company, is to 
bring tourists from the West to 
reconstructed castles and ther- 


Western capital — either direct imd baths for which Hungary is 
investments or joint ventures— noted. 


to expand hotel capacity from 
the present 47,000 (17,000 in 
Budapest) to its target of 70,000. 
A previous Austrian loan of 
$300m was used to build the 


Austrians represent the ethnic Hungarians visiting their 


cheap by Western standards. can buy $80 worth of pocket 
However, the 742,000 West money. Those who want to 
Germans ' who visited Hungary travel more often to the West 
last year spent three limes the can go to Yugoslavia, 
number of nights as the Despite Hungary's serious 
Austrians. In the first half of economic problems. Dr Czeg- 
this year, one-third more West ledi said he could not imagine 
Germans poured Into Hungary, the Government cutting back on 
Now both countries are seeking the availability of bard 

to achieve visa-free travel for currency for travel. The free- 
each other’s citizens, such as dom to travel to the West is 
between Hungary and Austria, regarded by citizens as one of 
A good many Germans, and their foremost gains over the 
some Austrians as well as past 20 years. 


LnReCoffit 


Continued from page I 

! After decades of prevarication, 
Hungarian officials appear set 
on industrial restructuring and 
the introduction of all impor- 
tant wage differentials over the 
next few years. The principle of 
a guaranteed wage for every 
worker regardless of productiv- 
ity led to a situation best 
summed up by an Hungarian 
joke; On a visit to a factory Mr 
Kadar asked at the front gate 
how many people worked in the 
plant ’About half of them * came 
to reply. 

The pattern of Hungary's vital 
: exports to the West reflected 
Ithe low competitiveness of its 
■manufactured goods. Saw znate- 
’rials, feels and semi-finished 
goods dominated sales to West- 
,em countries in 1986 and this 
|:year. The drive to attract West- 
ern capital into investment- 
j starved Hungarian industry by 
(promoting joint ventures with 
Western companies showed 
■some success over the past year. 
jBut most Western companies 
I] still regard Hungary as a place 
r to- unload low technology or 
utilise cheap labour. 

Hard currency income from 
tourism was one of the few 
bright spots in the economy 
over toe past two years but 
could not make up for toe wors- 
ening terms of trade. Important 
agricultural sales to the EEC, 
Hungary's main Western mar- 
ket, stagnated in 1986 and did 
little better this year. Hie big- 


gest dilemm a however is that 
even if Mr Kadar and the new 
Prime Minister Hr. Karoly 
Grosz^are determined to cany 
out toe reforms with the great- 
. est urgency Hungary’s anaemic 
economic health leaves them 
little room for manouvre 
The nation’s depressing bal- 
ance of payments shortfall lu 
1986 of $L4bn may prove diffi- . 
-cult to redress substantially in 
the near future. Meanwhile, 
Hungary's net hard currency ■ 
debt rose inexcerably to more 
than $9bn in the first half of the 
year. The austerity programme 
though stipulates a ’gradual 
stop ’in the external debt rise, 
whose servicing now costs 75 


per cent of Hungary’s hard, cur- 
rency exports. This however 
would mean continuing to ex- 
port goods at any price, while 
curbing vital imports needed to 
restructure Hungarian indus- 
try. 

Inside Hungary it is widely 
agreed that the greatest danger 
to the reforms could be the very 
centralism of the Government’s 
approach which may become 
unavoidable to deal with the 
Haltering economy -in shorta 
slide-back to toe centrally-ad- 
ministered economy which the 
1968 reforms set out to replace 
with one based upon indepen- 
dent, market-oriented compa- 
nies. 


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Agriculture 


Strategy switch to value- 



AT THE LARGE combine form 
of Kornyei, near Gyor in 
north-west Hungary, farm ad- 
ministrators are looking to di- 
versify beyond traditional farm 
produce to survive and earn 
much needed hard currency. 
The diversification planned is 
hardly the most glamorous in 
the agro-industry constellation, 
but It is tailored to the farm's 
■strengths. It plans to enter far 
hat manufacturer, and to com- 
pete internationally in the sup- 
ply of specialised feed stocks. 

Kornyei has grown rabbits 
since 1971. The fur is processed 
using West German equipment 
bought fifteen years ago from a 
nearby State farm which went 
bankrupt, and until now its for 
has been exported, primarily to 
Japan, to be used in the manu- 
facturer of hats. The for 
amounts to only 15 per cent of 
the value of a hat, so, In the 
words of Mr Istvan Mosxar, one 
of Kornyei’s directors, the form 
wants more of the profit 

The farm has also been a net- 
internal exporter of feed stock. 
It plans to invest 300m forints 
(about $&2m) in new equipment 
to boost production, mostly for 
export markets. Domestic banks 
will provide twotolrds of the 
capita] and toe farm one third. 
Three West European compa- 
nies are tendering for the con- 
tract. 

"What is expected of us in the 
current five-year plan is that we 
make money, and that's what’s 
important If we don't then it is 
bankruptcy,* says Mr Moszar. 
"But it is not easy to be competi- 
tive and profitable in the mar- 
ket many other state forms and 
co-operatives are active in it* 

Both attempts at diversifica- 
tion are planned with Western 


markets clearly in mind. As Mr 
Moszar points out, there was no 
way Kornyei would have re- 
ceived permission to buy the 
foreign machinery necessary 
for the two projects if they were 
only going to be used to satisfy 
domestic demand. 

Also both projects fit in the 
with Government's strategy of 
changing the profile of Hunga- 
ry’s exports away from unpro- 
cessed raw materials to exports 
of higher finish and value ad- 
ded. Agricultural trade ac- 
counts for about 25 per cent of 
Hungary’s hard currency earn- 
ings in any one year, and that 
position has to maintained at 
least, and at best improved. The 
country needs foreign currency 
like a thirsty man water. 

Agriculture is one of the suc- 
cess stories of Hungary. It was 
the first sector of the economy 
to feel the winds of liberalisa- 
tion associated with the largely 
benign role of Mr Janos Kadar, 
the general secretary of the 
Hungarian Socialist Workers’ 
(Communist) Party. The liberal- 
isation, which includes the en- 
couragement of private land 
ownership and cultivation, had 
made Hungary one of Europe's 
most efficient agricultural pro- 
ducers. 

But the problem for Hungary 
is that it is an efficient agricul- 
ture producer in an age when 
efficiency has become irrele- 
vant Record agricultural sur- 

S luses in the EX), the US, Cana- 
a and Australia, mean that toe 
outlook for commodities snch as 
meat and grain is very poor. The 
prospect of aggressive sales 
from EC stockpiles of meat, 
grain, butter, cheese and wine 
to the Soviet Union or the Third 
World bodes ill for the Hungari- 
an economy. 


"We've lost most on the world 
market* says Dr Imre Fekete, a 
counsellor to the Minister of Ag- 
riculture, "and this is mainly 
due to the EC* Hungary is also 
fighting for market share at a 
time when prices have come un- 
der heavy downward pressure. 

According to official figures, 
Hungary was selling pork for 
$3,186 a tonne in 1980, while in 
1985 the price bad fallen to $647 
a tonne. The same It true for 
beef ($L341 in 1980 compared 
with $707 in 1985), lamb C$1,712 a 
tonne in 1980. compared with 
$1312 a tonne in 1985), and poul- 
try ($1,212 a tonne in 1980, com- 
pared with $797 in 19K5). 

Hungary faces other prob- 
lems. Not only are toe markets 
of Western Europe and the US 
closing to outside producers, 
thereby putting a structural 
break on growth and revenue, 
but the Hungary’s other mar- 
kets, principally, but not exclu- 
sively, those in North Africa 
and the Middle East which are 
aligned to Moscow, are becom- 
ing less reliable. 

From 1980 until 1984 hard cur- 
rency export earnings from the 
'developing* countries nearly 
doubled from $134. lm to 
$2l2L9m. But in 1986, export 
earnings were below 1980 levels 
at $1 15.7m. There is demand in 
these countries for our goods," 
says Dr Fekete, "but they can’t 
pay-" 

So, like many export-depen- 
dant agricultural producing 
countries, Hungary is producing 
more and earning less. Last 
year its hard currency agricul- 
tural terms of trade fell 11 per 
cent, and this year does not look 
encouraging The terms of trade 
for Hungary’s total hard curren- 
cy trade weakened by 7 per cent 
lag* year and are forecasts to 


decline by about 0 per cent this 
year. 

This gloomy prospect is also 
clouded by successive poor 
years for the agricultural econ- 
omy. Due to unfavourable 
weather conditions and the 
Chernobyl disaster the agricul- 
tural economy foiled to achieve 
its 1984 level of production in 
1985 and last year. US govern- 
ment forecasts believe that it 
will not regain 1984 levels in the 
foreseeable future. 


Certainly, this year’s output is 
ore than likely to bear out that 


more 

pessimistic prediction. An un- 
usually severe winter was re- 
sponsible for poor winter cere- 
als crops, spring frosts caused 
widespread damage to fruit, 
while drought in summer, com- 
pounded by hail, badly affected 
wheat, maize, beets and grape 
production-The country’s pre- 
mier wine producing district of 
Tokaj had 80 per cent of its 
vines damaged - 20 per cent so 
badly that they will have to be 
cut out - and It will be years be- 
fore the area returns to recent 
production levels. 

The Government has initiated 
relief programmes intended to 
deal with about $260m of accu- 
mulated farm debt, and, in par- 
ticular, the losses associated 
with the 1985 drought This 
year’s weather-associated ca- 
lamities can only be expected to 
exacerbate the already parlous 
state of the form economy. 

But, the authorities hope that 
the new strategy of encouraging 
the development of agro-indus- 
txy, like those at Kornyie, which 
has a higher level of value ad- 
ded will help ameliorate the 
current structural weaknesses 
in its agricultural trade. 

Simon Hotoerton 


HUNGARIAN SURVEY 
11th September 1987 


To: Mahlr Hungarian Publicity Company 
Budapest 5 
Felszabadulas ter. 1 
H-1818 Hungary 

Please let me have more information concerning the products 
and/or services of the Hungarian advertisers: — 


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Name/Position 


KGYV 

K & H BANK 

MALEV 

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Nature of Business 


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Financial limes Friday September 11 1987 




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Ideas bring growth to finance. 

The birth of 
Ferruzzi Agricola 
Finanziaria. 


In October 1985 Gruppo Ferruzzi set out its 
plans to create one of the biggest agro-industrial 
groups in the "world, to extend its activities into- 
new sectors and to expand into new continents. 
In less than two years Gruppo Ferruzzi has 
become the largest agro-industrial group in 
Europe and the third largest in the world. 
Furthermore it is the second private-sector 
industrial conglomerate in Italy with an 
aggregate turnover of over 18 bflKon dollars. 

The Group’s idea to use agricultural products 
for industrial and energy uses, and its related 
programme for environmental protection is a focal 
point of international debate. The driving force 
behind this extraordinary expansion has been 
Agricola finanziaria, the Group’s holding company. 
Its success on the financial market has allowed 
it to make large-scale investments such as the 
acquisition of CPC Europe, leader in the starch 
sector, the acquisition of a controlling interest in 
Montedison arid B£gjiin-Say, and the 
restructuring of the sugar sector which makes 
the Group Europe’s leading sugar producer. 

The market capitalization of the Agricola 
Finanziaria group amounts to about 20 billion 
dollars. 




And now it is time for it to grow even more. 
Agricola Finanziaria is increasingly identified 
with Gruppo Ferruzzi and so Ferruzzi Agricola 
Finanziaria has been bom. 

All the activities of the Group will converge in 
the new holding company so that in due course 
Ferruzzi Agricola Finanziaria and Gruppo 
Ferruzzi will form a single entity. 

Its theatre of operations is increasingly 
worldwide. 

Ferruzzi Agricola Finanziaria will span five 
continents. 

Its widely diversified activities follow a single 
vertical structure from agriculture to services, 
from trading to agro-industry, from chemicals to 
the advanced services sector and finally to 
numerous industrial and financial shareholdings. 
Ferruzzi Agricola Finanziaria will be quoted on 
all the main European Stock Exchanges 
including London and Paris. This will lead to a 
broad national and international shareholder 
base in line with the Group’s importance. 

The cycle is in constant movement: two years 
ago ideas brought growth to finance. Today 

Finance is bringing growth to ideas. 

Ferruzzi 

r Agricola Finanziaria 


®sr 




18 


Financial Times Friday September 11 1987 


THE ARTS 



Arts 

Week 


FISISuIMlTnlWlTh 


18 19 20 21 22 23 24 


Exhibitions 


LONDON 


The Tate Gallery- Turner in the new 
Clore Gallery: The Turner Bequest, 
which amounts to nearly 300 oil 
paintings, finished and unfinished, 
and a further 19,000 or so watercol- 
ours and drawings, has been a 
source of controversy and dissen- 
sion ever gineg it came into the na- 
tion’s hands more than 230 years 

ago. Turner had always wished for a 

gallery to himself which would show 
all aspects of his work. Whether be 
would have approved of James Stir- 
ling’s extension to the Tate as a suit- 
able setting is a nice question. The 
larger paintings may be hung too 
low for one who lived in a more os- 
tentatious age, and the tasteful oat- 
meal Stirling has decreed for the 
principal galleries is a far cry from 
the rich plum he is known to have 
preferred. The vulgar neodeco of 
the entrance hall has little to recom- 
mend it Bat eight rooms for paint- 
ings and one for watercolours give 
room enough, and with the three re- 
serve galleries upstairs, every paint- 
ing but the few in restoration or cm 
loan is on the walL 


WEST GERMANY 


sculptures, theatre performances, 
architecture and design. The Docu- 
ments was founded in 1955 by local 
painter Arnold Bode with Henry 
Moore, Alexander Calder. Max 
Ernst and Joan Miro and is an im- 
portant venue for modern art This 
year director Manfred Schnecken- 
burger presents the works of 150 
artists, and for the first time open 
air sculptures which wiU be' erected 
in Kassel's city centre. Artists exhi- 
biting include Ian Hamilton Finlay, 
Javier Mariscal, Robert Morris. 
Mark Tansey, Alexander Mel amid, 
Eric Fischl, Leon Golub, Robert 
Lon go and Joseph Beuys. There is 
also a separate exhibition The Ideal 
Museum' where 12 architects pres- 
ent their ideas for Museum con- 
struction. Ends Sept 20. 

FfiMesfaeim, Roemer- und Pelizaeus- 
Museum, Am Steine 1-2. Egypt's 
rise to a World Power More than 
300 pieces loaned by 20 museums in 
Europe, Africa and America - the 
first presentation of the most impor- 
tant 150 years 1550-1400 BC of the 
New Empire in Egypt The bust of 
Pharaoh Thutinosis HI, discovered 
in 1807 without a face, can be seen 
complete in Hiidesheun. The face, 
found in Egypt only 20 years ago, 
was loaned by a Cairo Museum. An- 
other highlight is a reconstruction 
of the 3000 year old burial chamber 
or Sennefer, the former mayor of 
antique Thebes. Clothes, household 
appliances, tools, cosmetics and je- 
wellery illustrate the everyday life 
of Egyptian citizens. Ends Nov 29. 


ITALY 


Kassel: Museum Fridericanum Orang- 
erie: Documents B "World exhibition 
of contemporary arts': paintings 


Venice: Ala Napoleonica and Museo 
Co [Ter: ‘Matisse and Italy 1 : over 250 
works by one of most poetic of 30th 
century French Painters. The exhi- 
bition includes paintings, drawings, 
and Matisse's entire output of sculp- 
ture (75 pieces in all], lent by private 
and public collections in France and 
America, and the Musee Matisse in 
Nice. Pierre Schneider, the organiz- 
er, has attempted to show how the 
works of Italian painters such as 
Mantegna, Pollaiolo, Giorgione and 


Veronese may have influenced Ma- 
tisse. Until October IB. 

Borne: Palazzo Braschi: Painter-Photo- 
graphers in Rome: 1B45-1870: The 
term Painter-Photographer was 
used almost up to 1970 to describe 
the early photographers, even if 
they had never painted. An absorb- 
ing collection of documentary photo- 
graphs oE Rome, inducting a collec- 
tion by the English archeologist. 
John Henry Parker, and some stri- 
king portraits, all from the archives 
of the Rome Cornune. Ends Sept 27. 

Venice: Palazzo Grassi; Jean Tinguely: 
1954-1987: The jokey m ec ha ni cal 
sculpture of Swiss artist Jean 
Tinguely. A gentler, but still mis- 
chievous, version of Salvador Dali, 
Tinguely describes same of his in- 
credible moving sculptures (all built 
from refuse iron and steel) as ‘‘ma- 
chines a sentiments,” and the com- 
plexity and sheer improbability of 
his works communicate a touching 
“joie de vivre." Over 300 works are 
on show, lent by A me rican and Eu- 
ropean museums, with photographs 
of his first Self-Destructing Sculp- 
ture. Homage to New York, which 
duly self-destructed in the gardens 
of the Museum of Modem Art in 
New York in I960. Ends Oct 18. 


NEW YORK 


CHICAGO 


Ait Institute: Walker Evans photo- 
graphs of the 1930s showing poverty 
and despair in the American South 
were famous in their time in Life 
Magazine and preserved in James 
Agee's moving book. Let Us Now 
Praise Famous Men. This exhibit is 
a reminder at a time of renewed 


despair in the American heartland 
of the scope and depth of Evans’ 
work originally done for the Farm 
. Security Administration. Ends Nov 
8. 


WASHINGTON 


National Gallery: A Century of Mod- 
em Sculpture, the Patsy and Ray- 
mond Nasher Collection, contains 
major works by Rodin. Picasso, Ma- 
tisse, Gabo, Giacometti, Ernst, 
Moore and Sera. Ends Jan 3. 


Hirschhorn Museum: One of the Chi- 
cago contemporary primithrists 
whose repeated scenes make evoca- 
tive Images has his first major east 
coast retrospective with 49 paint- 
ings and four painted constructions. 
Ends Oct 18. 


TOKYO 


IBM Gallery: Post Modem Architectu- 
ral Visions indudes an international 
array of designers including Mi- 
chael Graves, Hans Hollein, and 
Adolfo Natalini with 200 drawings 
and models of work from 1960 to 
1985, originally organised by Willi- 
ams College and Deutsches Archi- 
tekturmnseum in Frankfurt Ends 
Nov 7. 56th & Madison (407 6100). 


Chinese Paintings and Ceramics of the 
18th-20tfa century: 144 paintings and 
33 ceramics comprise this important 
exhibition from the Yang He-Tang 
collection in Taipei The paintings 
include traditional-style waterco- 
lours of landscapes, birds, flowers 
and portraits. Especially interesting 
are works by literati painters with 
their political overtones - Orchid/ 
bamboo/ rock or pme/bamboo/phim 
compositions symbolising difficul- 
ties in a harsh political climate. 
Works of China's two most impor- 
tant modem painters, Chi Pai-Shih 
(1863-1957) and Eli Pao-Shih 
(1904-1965), are hiduded. The cer- 
amics. mostly Ch’ien-Lung, a ware 
synonymous with excellence, were 
made for the Impeial family. Idem- 
itsu Museum, Hibiya, near main ho- 
tels and Ginza. Ends Se pt 27. 


Modem 


Paintings of Ya- 
. 120 works of one of 
Japan's foremost contemporary art- 
ists. From Nihonga (19th century, 
Western-influenced Japanese paint- 
ing) to abstract futuristic themes, he 
is one of Japan’s most prolific art- 
ists. N ational Mn wwm of Modem 
Art, near Takebashi Station, off Im- 
. perial Moat Ends Sept 27. 


Music 


Stradivarius and Cremona 


Parker baritone, William Euckaby 
piano. AJi-Welll programme fThur). 
67th w of Broadway (362 8719). 


LONDON 


Alban Berg Quartet: Beethoven and 
Berg- Quean Elizabeth Hall (The). 
(9283191). 

Academy of SL Marfin-in-the- Fields: 
directed by Ions Brown. Bach. 
Haydn, Stravinsky and Mozart. 
Queen Elizabeth Hall (Wed). 

London Fb2harmomc conducted by 
Sir Georg Solti with Alfred Brendel, 
piano. Brahms ■•nd Tci ~~ 

Royal Festival Hafl 
(928 3191). 

London Classical Players: Beethoven 
series co ndu cted by Roger Nozring- 
ton with Mehyn Tan, fortepizno. 
Queen Elizabeth Hall (Thur). 


Tbe City of Cremona is not allow- 
ing the 2S0th an n ivers a ry of its 
most fa moos son’s death to go 
unnoticed. In five rooms of the- 
Palazzo Cmmmale — ffl y afnifr 
controlled lor temperature and 

h umi dify — dnHn. 


PARS 


La Manraehe, Burgundy's Vocal En- 
semble conducted by Jacques Edri- 
var-d: Canticnero de Uppsala (Mon, 
8 JO pm). Saint-Severm Church. 

Wladfanir Mfimllca, guitar: One h our 
with Bach (Tue, 7 pm). Auditorium 
des Halles, Porte SL Eustache. 

BmlHa PnHrni, har p^H-hi^ - F na co b al- 
di, Froberger. Couperin (Wed, 7 pm). 

Auddoriom de$ HftHfts, 

Orchestra National de Lflfe, Regional 
Choir Nord-P&s-de-Calais conducted 


p jfjpd an exhibition of 45 ai 
560 or so sur vi v ing instrume nts 
xnaik by Antmtio Stradivarfais, in 
coflaboratkm with. ItaEan Archi- 
tect Gae Antarti. The instru- 
ments, mostly violins, bat with a 
handful of violas and cellos, at 
mandofin and a harp, have been 
lent by museums : 
lectors. 


CHis n nuMi l u j—u , . - 1 P p 

formers will play Stradivarnis in- 
struments, ending on September 
28 with a performance of 

Brabm’s vfofin concerto (wtih 
Salvatore Accardo) conducted fay 
Carlo Maria Giulini. 

There wDl be a two-day confer- 
ence at the beginning ©I October 
and exhibitions of con- 

temporary documents and music 

scores. A film of the life of Stoat- 

ivarins is being made by Giaco- 


WASHMGTON 


National Symphony (Concert Hall}: 
Mstislav Rostropovich conducting, 
Gary Huffma n 'ceflo, David Evitts 
baritone, William Neil organ with 
Oratorio Society of Washington di- 
rected by Robert Shafer. Carter, Pis- 
ton, Copland, W. Schnroan (Thor). 
Kennedy Center (2543776). 

Festival Orchestra (Terrace): 
Evelyn Elsing ’eeflo. H andel . Mm- 
ret, Schwartz. Haydn (Thur). Ken- 
nedy Center (254 9895). 


mn Baftiato (starring Anthony 
and the 


This coincides with the 89k 
Cremona Jtfnsfe Festival: 12 cob- 


Femovie Delhi 

State has good news for commu- 
ters from Milan: a special train 
will be provided after each con- 
cert rf n ri n g the festival to take 
rimwi the 90-pd d kil ometres 
JENNIFER GREGO 


TOKYO 


Chabrier. Ravel, 

(Thnr, 890 pm). SaHePfey- 


pm). Saint-Severin 
(45837959). 


Church 


All the above are part of the Paris' 
Festival Estival (4804 9602). 


NEW YORK 


et Marshall, soprano, F.B- 


Paul Knentt orchestra: Mozart (Die, 9 


BTff f fcfo Wall (Goodman House): Hurt 
Wain Festival SL Luke's Chamber 
Ensemble. David Atherton conduct- 
ing; Faith soprano, William 


Osaka philharmonic Orchestra, con- 
ducted by Takashi As ahina with Yo- 
ko Kobo, violin. AU-Beethoven pro- 
gramme. Hitomi Memorial Hall, 
Shura Women's CbOegB, Sangen* 
jaya (Mon). (573 3588). 

Mozart Chamber Orchestra. AD-Uo- 
zart programme. Ishibashi Memori- 
al Hall (Tue). (7B0 5400). 
ndiUonal Japanese Hatfe Tokyo 
University of Arts and Marie Gradu- 
ate Ensemble Koto Performance. 
Works include Eight Views of Oxoi, 
Autumn in Sags, Ode of Endless 
Sorrow. Dai Ichi Seimei Hail, Hflri- 
ya (Mon). (218 3810). 


Theatre 


LONDON 


Antony and Cleo patra 
HalTs best production for the Na- 
tional Theatre he leaves in 1988 
brings this great but notoriously dif- 
ficult play to thrilling fife, with Judi 
Dench and Anthony Hopkins as bat- 
tie scarred lovers on the brink of old 
age. Dench is angry, witty and ulti- 
mately moving. Best of the rest at 
the NT is Michael Gambon giving 
his finest ever performance as Ar- 
thur Mutex's doomed longshoreman 
in A View from the Bridge; Joliet 


Stevenson in a fine revival of Lor*. 
. ca’s Yenxuq-and David Hare’s pro- 
duction of ttn»g Lear, H fl j pMwc, a 
massive gnarled oak, which gathers 
force end more friends as it contin- 
ues in the repertoire (028 2532). 

The Phantom of the Opera (Her Maj- 
esty's): Spectacular hot emotionally 
nutritional new musical by Andrew 
Lloyd Webber ro- 

mance in Demux’s 1912 novel Hap- 
pens in a wonderful Paris Opera 
ambience designed by Maria Bjorn- 
son. Hal Prince's alert, affectionate 
production contains a superb cen- 
tral performance by Mtebari. Craw- 
ford. A new, meritorious and pel 


CC 


hit (839 2244, 
6131/2407200). 

The Balcony (Barbican): Sadly dated 
and heavy-handed opening to the 
BSCs Genet retrospective, not help- 
ing to fight suspicions that the RSC, 
certainly in London, is stretched 
way beyond its creative ca p aciti e s. 
Terry Hands directs, Farrah's set 


looks like a cheap pihk. brothel and 
theactors, a dafiji 


Jot, dump around 
on high boots in big bulging cos- 
tnmes. (828 8795). 

toffies (Shaftesbury): Stunning reviv- 
al directed by Mike Ockrent and de- 
signed by Maria Bjornscn, of Sond- 
heim's 1971 "wiakal fo which pot* 


soned marriages nearly undermine 
an old burlesque re-union in a 
doomed theatre. Four new songs, 
improved book by James Gold m an. 
Cast ted by DaWes Gray, 
McKenzie, Diana Rigg, Daniel Mas- 
sey. AH good. (3795399). 

Helen (Haymarket): Alan Bates pre- 
dictably good in. new Simon . Gray, 
drariy directed by Christopher 
Mpraban, about a jealous publisher 
viewed in n*««Hkaric from a psychi- 
atric ward after a breakdown. Men- 
ausal mntterings, not vintage 
y. (930 9832). 





i'll 


b! 


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THE ARTS 


N, 


Financial Times Friday September 11 1987 


19 



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C5nema/Nigel Andrews 


Kubrick’s killing theme 


RiB Metal jackal directed by Stan- 
ley Kubrick ,' 

Hefiralser directed by Clive Barker 

Business as Usual directed by LezIi- 
An Barrett v-:'.:v‘ 

Oatrsgcoas ForUiae directed by Ar- 
thur Hiller 


The .gestation period of a 
Stanley Kubrick film is pne of 
the wonders of the world. Every 
half-decade or so-, the director 
of movies such as 2001, Dr 
Strangelovc and The Shining 
delivers himself of another 
long-awaited offspring grown in 
a womb of .secrecy and pain- 
staking perfectionism- With 
each new film, though, it Is be- 
coming less dear quite why the 
baby has to spend so long being 
incubated: if indeed the baby 
is at all distinguishable from 
most of those delivered after 
more normal pregnancies. 

PuZZ Metal Jacket, - based- on 
Gustav Hasfonfs short' novel 
about marine' training and Viet- 
nam baptism The Short Thners, 
reaches the screen after a mam- 
moth shooting schedule — 
variously estimated at between 
six and ten «w>»*hg — and an 
even longer period of prepara- 
tion and deliberation. A' film's 
production history should nor- 
mally have nothing ts de with 
a verdict on its achievement 
But how else to-deflne Full 
Metal' Jacket’s impact —or lack 
thereof — except to -say that it 
feels like a movie that has been 
hatching so long it has forgot- 
ten quite why it was conceived. 

The -theme is .kQEng^and the 
different creeds and motiva- 
tioas that surround or shape 
manVimpolse-io JriH*is fellow 
marur “The openine 45 minutes 
push ns ^through “ boot camp," 
asa sqaadof marines cm South 
Carolina's Parris' Island are 
screarifed ■ and square-bashed 
into -military shape by -a fool- 
mouthed • gunnery sergeant 
(played by teal \ ex-army ' ser- 
geant lee Ermey). -After a 
brief Tend tragic hiccup in this 
pro c e ss— one . viptimised trainee, 
raises his gun against authority 
and fires — we are then tossed 
out into Vietnam./ . Here the 
storyfs - young. - obseryerbero 
(Matthew Modiae) .trudges 
throug h the hatf-ruined city- 
scapes , where sex is fin 1 sale 
and . lives anj for barter or 
betravdU'tintil'dhti fifan .gathers ' 

itself for its artoon elimax. In 
this, the squad be tas Joined 
is marooned in n maelstrom' of 
burning buildings and brutally 


ambushed by a lone Vietnamese 
sniper. - 

These scenes have a hdlfire 
intensity, that suggest what 
Kubrick may have been aiming 
for fo . the film as a whole. Two 
cornered soldiers are surgically 
maimed by the sniper’s bullets, 
which' here, simp sm arm or leg, 
there riddle a stomach, as toe 
victim's shock is registered as 
slowly and horribly as if we 
were watching an action replay. 
Kubrick rhymes, by implication, 
this physical decimation of a 
human -personality with toe 
psychological "breaking down" 
process of marine training wit- 
nessed earlier. But there are 
two problems. A lot of sluggish 
narrative water has flowed be- 
tween the two sequences. (The 
introductory Vietnam scenes 
are dismayingly lifeless). And 
the early Boot Camp training 
spree and yell-athon— though 
sprinkled with wonderfully 
neanderthal lines from the ser- 
geant (“You’re so ugly you 
could be a modem art master- 
piece”)— still seems like a re- 
run of any you’r e-in-th e-a rmy- 
now movie from From Here to 
Eternity to An Officer and a 
Gentleman. 

Full Metal Jacket — the title 
refers to a “humane" bullet 
casing which limits the spread 
of damage on entering the 
body — sets out to fulminate 
against the folly and hypocrisy 
of the limited kfll, against the 
absurdity, of a “ controlled " 
military response, against the 
whole deceitful apparatus of 
prawning war as a science (or 
a humanity). But the film itself 
seems limited, controlled and 
scientific. It is as 4f a white-hot 
subject has been. left to cool 
too long in the laboratory, or 
as if a potentially explosive 
theme has been encased in a 
damage-limiting jacket of dis- 
tance and deliberation; 


. These are defects of which 
Hefiro iser . . could not be 
accused. This fresh-hewn chunk 
of gothic nastiness was scripted 
and directed by British horror 
welter Clive Barker. What to 
do, it asks, when your dead 
lover is a restless pile of bones 
under the floorboards clamour- 
ing for reincarnation? Just sac* 
a problem faces Clare Higgins 
as the fortyish married heroine, 
when rite . and her American 
husband (Andrew Robinson) 
move into a new house, whit* 
turns pot not to be sew to her. 
Soon. the thing under the floor 
Is gpffly reassembling tiself and 
Miss Higgins Is nervously egg- 
ing it on. fiheJsgxven to under- 
stand tint a few freshly. rslain 
male corpse? Witt do 'wtmders 
hi' refreshing the -parts, that 
other Teincarnution methods -do 
not reach. 


BeUrdser carries on in this 
vein with exuberant inventive- 
ness and few gaps between 
frissons. Scenes in abattoir 
gothic style are varied with 
moments of more gourmet 
menace: though I never did 
quite understand what all those 
scenes featuring mystic oriental 
cubes and jangling chairs were 
about. Miss HifflpwE, however, 
with tar adamantine cheek- 
bones and hieratic hairstyle, is 
the most severely memorable 
murderess in recent cinema. 


Lezli-Au Barrett’s debut 
feature Business As Usuai has 
a formidable heroine. Glenda 
Jackson is the Liverpool clothes 
shop salesperson who accuses 
her boss of sexually harassing 
her colleague Cathy Tyon. 
Sacked for her impudence, Miss 
Jackson is seen stomping about 
outside the shop. Her husband, 
ex-union boss John Thaw, takes 
a dim view: "A jumped-up shop 
girl and you think you are God 
Almighty.” 

The film is decently acted and 
efficiently scripted. But it also 
tends to run about with politi- 
cal placards around its neck, 
and dubious ones at that Pugna- 
cious and programmatic it gives 
toe impression that It could turn 
at any moment into a PPB on 
behalf of the lunatic left, drag- 
ging Miss Jackson’s career as 
an actress rudely along with it. 

* 

Outrageous Fortune rounds 
out a trio of films tills week 
in which women take command 
as central characters. The gos- 
pel of feminism must at last 
have fallen into the in-tray at 
toe Hollywood production 
offices. In this would-be screw- 
ball comedy Bette Midler and 
Shelley Long — one plump, 
strident and ribald, the other 
blonde, prim and Anting — dis- 
cover they have been jilted 
by toe same man (Peter 
Coyote). They promptly turn 
amorous rivalry into vengeful 
solidarity and chase him all 
across America. (It turns out 
he is an ex-CIA operative who 
has stolen a deadly virus from 
a germ warfare lab.) 

The script is desperately 
whacky, except on the few occa- 
sions when it slows down 
enough to be passably witty; as 
when Mira Long gasps at her 
first sight of Miss Midler’s flat 
arauming it has been ransacked. 
“No, it always looks like this,” 
says Midlec. Elsewhere, as 
directed by Arthur Heller, the 
film is a frantic caper substi- 
tuting energy tor invention, 
and -snatching its title -from the 
"To be or not to be* speech 
like a thief hoping to improve 
himself by plundering, a piece 
of toe true artistic cross. 



Scene from “Full Metal Jacket 



Give Bussell and Harriet Walter 

A Question of Geography 

Michael Coveney 


AUsMr Stair 


A Question of Geography by 
John Berger and Nella BielsH 
is an initially trying but finally 
rewarding new play presented 
by toe RSC in The Other Place, 
Stratford-upon-Avon. This is 
toe Chekbomn dimension to 
Solzhenitsyn's Gulag reportage, 
plating tiie general outrages of 
Stalinist purges in the exact 
domestic milieu of an East 
Siberian labour camp -in 1952, 
several months before Stalin’s 
death. 

The capital of the Gulag is 
Ma gadan, where Harriet Walter 
as the imprisoned Dacha, 
offender of Article 58, Is expect- 
ing to see her student son. A 
■* 58 ” prisoner could have done 
anything. We never know what 
in Dacha’s but love is 
listed as a crime lor such 
enemies of the people. The poet 
Blok is quoted— “Of Russia’s 
m o ns tro us years we are the off- 
spring” and we see Dacha 
wrestling with the future of her 
Leningrad son 'Sacha (Linus 
Hostile), the voice of her “dis- 
appeared " husband (John 
Carlisle. sflkSly poetic on tape) 
and the present support affec- 
tion of Ernst (CUve Russell) a 
fellow Zone primner who is a 
doctor and therefore entitled to 
visit town in toe afternoons. 

John Caird's production is 
almost fatally slow to get going, 
allowing toe authors toe full 
indulgence of their rather over- 
elaborate stage indications «od 
pauses. Magadan, in fact, very 
nearly turns into a Mogodon. 
T.ttws like “How could we know 
that studying Hegel could lead 
to six millimetres of pointed 
steel in toe back of your neck?" 
do not help. But toe slow 
build-up pays dividends in 
allowing us into the lives of 
these people, listening to their 
tales of loss and political 
sensory deprivation before we 
see a reformed family triptych 
— symbolically represented in a 
smuggled memento from toe 
Hermitage — brutally smashed 
in the second half. 

Miss Walter, burning on a 
Slow fuse, Roods the play with 
a grave and sentient beauty in 
spite of the handicap of an all 
too visible trig join. Visitors 


to the enmeshed corral aU 
bear with them the vivid marks 
of persecution, and all are 
vividly played: Jimmy Gerdner 
is a jolly reprobate who waltzes 
through the musical imposition 
of dialectical materialism on 
“ Auld Lang Syne Mark Dig- 
«mi an outlawed violinist with 
eloquent stories of “ the begin- 
ning behind toe hill”; Susan 
Colvard a blinking textile fac- 
tory worker; Sonia Ritter a 
young woman newly tom from 
her beloved. 

A new wave of arrests is 
immin ent and the old butcher’s 
arteries are reported to be 
thickening — with the blood of 
others. This is a tale of bow 
people lived together — still 
live together — this cen tury on 
the say-so of criminal tyrants 
and bureaucracies. With a half- 
hour speed-up and an elimi- 
nation of spurious portentous- 
ness that infects great stretches 
of the evening from scene- 
changes to tester-r e a din g— the 
curtains blow and lights dim 
whoiever the past comes up — 
this will be a not so pastoral 
tragical comical history lesson 
for our times. And, i n ciden tall y, 
a vast improvement on Mr Ber- 
ger’s previous self-important 
foray into the theatre. 


Royal Opera House 
appoints new director 

The Royal Opera House has 
announced that Paul Findlay, 
currently Assistant Director, 
has been appointed Opera 
Director in succession to Mrs 
Eva Wagner-Pasquier. He will 
be responsible for the artistic, 
managerial and financial control 
of toe Royal Opera, reporting 
to the General Director of the 
Royal Opera House. 

The post of Assistant 
Director is to be abolished, 
with those responsibilities taken 
over by the Chief Executives 
of the three companies, The 
Royal Opera, The Royal Ballet 
and Sadler's Wells Royal Ballet. 

Mr Findlay joined the Royal 
Opera House in 1968 and has 
been Assistant Director since 
1975. 


Die Fledermaus/Grand Theatre, Swansea 


" Not another Flederntaus ” is 
perhaps the unspoken thought 
of both reader and writer, but 
the new production with which 
toe Welsh National Qpera has 
opened its 1987-38 season is 
emphatically not just another 
Fledermaus. It Is at once one 
of the wittiest and most aware 
stagings of toe work it has been 
my good fortune to encounter. 

Praise first to Gyorgy Fischer 
and the WNO Orchestra: there 
is a freshness to toe perform- 
ance that can perhaps only 
come from players who have 
not been bashing through the 
score thrice weekly for decades 
(in fact the work has been out 
of the company’s repertoire for 
14 years). Mr Fischer’s reading 
is notable for slyly understated 
nuance and mercifully free 
from toe laboured application 
of rebate that can afflict even 
the best conductors when faced 
with Fledermaus. not to men- 
tion the worst. The orchesetra 
really plays right through the 
phrases, firmly and buoyantly, 
textures are admirably clean, 
and the music sounds as fresh 
and joyous as the day it was 
written. 

The triumph of the West 
German director Helmut 
Polixa, making his UK debut, 
is to have contrived an essen- 
tially didactic production yet 
ensured that it remains daz2- 
lingly funny. The characters of 
Fledermaus, in the words of 
the excellent programme-note 
writer, inhabit “ toe shady, 
grey world of petit bourgeois 
aspirations . . . racing with 
relentless logic from one lie to 


Rodney Mihtes 

the next.” Hypocrisy is toe 
name of .toe game: Alfred and 
Rosalia de are down to their 
undies by the time Governor 
Frank enters Kaftrin Kegler’s 
ultra-chic, timeless first-act set 
(polar bear rug and white 
boudoir grand), and there is 
no doubt as to the purpose of 
Orlovsky’s party (in an expres- 
sionist winter garden with giant 
scatter cushions), so much so 
that after the group foreplay of 
“Duidu” it’s something of a 
mercy that toe curtain descends 
when it does. 

Most important, thanks to Mr 
Polixa’s extra-sharp direction 
of the dialogue, do one shows 
the slightest sign of knowing 
that they are funny, the secret 
of good farce-playing from Fey- 
deau to Ben Travers. Only in 
toe last act, with Frank's merry 
pantomime and a ghastly joke- 
wig for Dr Blind, does the iron 
control of mood falter. That, 
and the oddly sour characteri- 
sation of Adele (toe Laughing 
Song is for her a moment pf 
acute social embarrassment, 
though Andrea Bolton sings it 
beautifully), are the only 
questionable elements in a 
presentation that balances 
challenge and entertainment 
with extraordinary adroitness. 

The cast serves Mr Polixa 
loyally. Suzanne Murphy’s ab- 
sent mindediy voluptuous Rosa- 
Unde, strongly sting and crisply 
enunciated, is a brilliant comic 
creation; Laurence Dale’s seedy 
little terrier of an Eisenstein, 
Hitler cowlick and all, is rather 
a courage uos assumption for a 


jeune premier tenor; Peter 
Bronder (Alfred) made us want 
to hear him in all tenor roles he 
gave ns extracts from in prison; 
Deborah Stuart-Robert’s andro- 
gynous Orlovsky, Donald 
Adams’s hideously jovial Frank 
and Henry Newman’s Schnitz- 
lerian Falke all hit the mark. 
Perhaps a Froseh of Sebastian 
Shaw’s distinction deserved 
some better lines, but his defi- 
nition of opera as “purveyor 
of cheap thrills to old ladies of 
both sexes " struck home. Argu- 
able, but this particular old 
lady enjoyed himself hugely. 



Andrea Bolton 


Saito Kinen Orchestra/Barbican 


The truly splendid Japanese 
orchestra that gave its first 
Loudon concert on Wednesday 
is not really a constituted 
orchestra at all, but a tempo- 
rary collection of Japanese 
soloists. They are currently 
touring Europe (with toe 
sponsorship of NEC, among 
other Japanese firms) under the 
title of Philharmonic Soloists 
of Japan, though their alterna- 
tive one — Saito Kinen Orchestra 
—tells more about their history 
and purpose. 

Hides Saito (1902-74), toe 
founder in of the famous 
Toho Gakuen music school of 
Tokyo,' was, we are told almost 
single-handedly responsible for 
the post-war flourishing of 
western music in that city. His 
school has produced an extra- 
ordinarily rich crop of fine 
musicians— Seiji Ozawa, who 
conducted most of last night's 
concert, was one of Its first- 
year pupils, and many of today’s 
most successful Japanese string 
players started their education 
these. ■ 

The orchestra,_ whit* has 
g at hered its ex-Tofco Gakuen 
students from a» across the 
globe, and which on Wednea- 


Max Loppert 

day included such distinguished 
soloists as Yuzuko Borigome 
and Tomotada Sob among the 
violins and Nobuko Xmm at the 
head of the violas, Is by its very 
nature bound to remain a some- 
time thing; the pupils first per- 
formed together, in their 
master’s memory. In 1984, and 
after their current tour wsll. 
probably not do so again until 
the early iuOOs. 

These are, therefore, soloists 
in one sense — but by their 
belief in the purpose for which, 
they were first assembled, and 
by the tremendous sense of 
unity that marked every bar of 
these London performances, 
they are capable of forming a 
real — and in many respects 
really first-rate-orchestra. One 
expects well-trained Japanese 
string players to work precisely 
together in ensemble, but the 
tonal unanimity, decisiveness, 
and absolute commitment of 
the string playing were never- 
theless wholly remarkable; and 
the other orchestral depart- 
ments, though less startling in 
corporate excellence, certainly 
maintained the general stan- 
dard. (There was no explana- 
tion for the presence ot the 


Berlin Phil’s superb Karl 
Leister at the bead of the 
clarinets.) 

Id Strauss’s TQl Eulens- 
piege 1, conducted by Kazuyoshi 
AJdyama (another Toho Gakuen 
pupil who has became a pro- 
minent conductor), the firmness 
of the phrasing was even a 
little fierce — it was pleasant to 
hear the piece done entirely 
without archness, but a little 
airy comedy would not have 
come amiss. Ozawa took over 
for the Mozart string Diverti- 
mento, K136, similarly a little 
heavy and insistent, lacking in 
galanterie but thrilling as 
sound. Then under Ozawa the 
conceit achieved after the 
interval an unforgettable 
Brahms First Symphony: one 
of those performances, rare 
enough in any city or from any 
orchestra, of heart, soul, and 
glorious fullness of sound, that 
rose to fiery grandeur In the 
flnwlA, all sense of dread 
routine or over-familiarity 
blown away. Given the nature 
of this orchestra, it was in all 
senses an occasional perform- 
ance; it fully suggested what 
an inspired pedagogue Hideo 
Saito must have been. 


The last concert I heard the 
BBC Symphony Orchestra play 
under Gfinter Wand earlier 
this year was a conceit of rare 
distinction. Wednesday’s Prom 
with the same orchestra and 
conductor was not of quite the 
same elevated stature: but how 
keenly none the less, without 
foil, the BBCSO respond to 
Wand’s direction — and what 
enthusiasm they convey in their 
performance.' 

The programme opened with 
what was not by any means a 
technically flawless account of 
Stravinsky’s Firebird suite (the 
third and final version of 1945) 
— there was some splendid 
ensemble playing in some of the 
trickest measures, and some 
ragged moments too; the brass 
was enthusiastic, but not always 


Wand/Albert Hall 

Dominic Gill 

reliable. But the music came 
across with such life, and such 
a wealth of unstoppable energy, 
that such occasional .rough- 
nesses mattered hardly at all. 
The best moments were very 
fine: a luscious Dance of the 
Princesses, glossy early-Stravin- 
ski an velvet; a wickedly glint- 
ing Infernal Dance. 

It Is commonplace that con- 
ductors tend to slower tempi as 
they grow older. Perhaps Wand 
is the exception to prove the 
rule — for if anything his tempi 
have become brisker with the 
passing years. He took the open- 
ing movement of Schubert’s 
Great C major symphony at a 
cracking allegro, strong, 
flexible, never breathless, but 
urgent enough to permit no 
hint of maestoso in the cli- 
maxes. That was certainly the 


Intention: I’ve remarked before 
that careful understatement, 
and toe absolutely precise, un- 
inflated placing of climaxes, are 
as integral to Wand's method- 
ology as stick-waving bombas 
is to the general conducting 
stock-in-trade. Wand lets a 
Schubert climax swell proudly 
enough; but he will never in- 
dulge it to bursting point. 

It was characteristic too that 
under Wand's baton the huge 
slow movement was solemn but 
unlaboured, and the scherzo 
had a fierce and wholly unsenti- 
mental edge to its gracefulness. 
I loved his reading of the finale, 
even though I don't remember 
ever hearing the music either 
played or sound so fast: a bril- 
liant, jubilant headlong flight, 
sustained with Promethean 
energy from first to last 



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Arts Week ^(an week except Sun and Moo). 


Continued from Page IB 

Setioui Money (Wyndbam's): Transfer 
. from Royal Coart of Caryl Qmr- 
chflTs VKrir City comedy for cfaam- 
pagne-swiHi&g yuppies: how the Big 
- Rbtm . led to olim »irmnlt atyi bar- 
row-boy draHng a on the Stock Ex- 
change. Hot anxl livid, but new cast 
deemed less good. (838 3028, CC 

A SnudpFamfiy Bu e lnes s (Ofivier): 
BrflHant new Alan Ayckboorn play 
about Britain on the fiddle in greedy 
timwi, yffing out to foreigners and 
fcpoptng ft simultaneously in the 
family. A comedy thriller on the 
large scale, Ayckbourn's own pro- 
duction is ted majestically by tt- 
chftd Gambon, Best of the NT rest 
remains King Lear and Antony and 
. Cleopatra in the Ofivier. A View 
' From toe Bridge to th e Cott estoe. 
The new Brian hid adaptation of 
Turgenev's Fathers and Sons b de- 
cent but dull in the Lyttelton. 

' (828 2252). 

Three Hen an a Horae (Vtadevniefc 

George Abbott^ sprightly gfflnhUsg 
comedy has transferred fiourthcr 
National. Geoffrey Hutchings in the 
-■ bad now joined by Toyah Wikax 
(838 8887)- 

NETHERLANDS 

Anwtwdmw, StadMchouwfatag. The 

English Speaking Theatre of Am- 
sterdam in Barrie Keefe's trilogy 
Barbarians directed by David Swat— 


MEW YORK 

Fences (46th Street): August Wilson 
fait a home-run, this year's Pulitzer 
Prize, with James Earle Jones tak- 
ing the po werfu l lead role of an old 
baseball player raising a fam ily in 
- an industrial dty in the 1850s, try- 
ing to improve lot but dogged by his 
OWU faiHnfre. (221-1211). 

Cats (Winter Garden): Stfll a sellout, 
Tranjr Bonn’s production of T-S. El- 
Hot's children’s poetry set to trendy 
tnn6p is visually startling and 


only to the sense <d a rather staid 
and overblown idea of th ea t ri cal it y. 
(239 6282). 

Gad Strert Majestic}: An immodest 
celebration of the heyday of Broad- 
way in the ’30s incorporates gems 
from the original ubn Qfce Shuffle 
Off To Buffalo with the appropri- 
ately brash and leggy hoofing by a 
large chorus line. (977 9020). 

A Chores Lme (Shubert): The Imgest- 
running musical ever to America 

has not only supported Joseph 
PappTs PubHc Theater' for eight 
years but also updated fee nmsife a l 
genre with its backstage stray in 
which the songs are used as audi- 
tions rather than emotions. 
(2396200). 

la Cage anx Folks (Palace): Wife 
some tuneful Jerry Herman songs, 
Harvey Fierstem's adaptation of the 

- French mananaa. barely, to cap- 


ture fee feel of fee sweet and hilar- 
ious original between high-kicking 
and gaudy chores numbers. 
(7572628). 

rto No* Bappapert (Booth): The 
Tan/ s best pla y of 1 988 won on the 
strength of its word-of- mo u t h popu- 
larity for the two oldsters on Ceatral ' 
Park benches who bicker uproar- 
iously about fife past, present and 
future, with a funny plot to match. 
(2396200). 

In ffiseraUes (Broadway): Led by 
Colm Wilkinson repeating his West 
End role as Jean Vaijean, the mae- 
nificeat spectacle of Victor Hugos 
mgjestic sweep of history ami pa- 
thos brings to Broadway lessons in 
pageantry and drama, if not strict 
adherence to its original s o u r c e. 
(2396200). 

S tarl i ght Express (Gershwin): Those 
who saw the original at the Victoria 
m Iundon will barely recognise its 
American incarnation: the skaters 
do not have to go round the whole 
theatre bat do get good exercise to - 
fee sproced-ap stage wife new 
bridges and American scenery to 
distract from the hackneyed pop 

music and trumped-up silly plot. 

(586 6518). 

Me and My GM (Marquis): Even if the 
plot turns on ironic mimicry ot ftrg- 
nudioa. this is no classic, with for 
gettahle songs and dated leadenness 
to a stage mil of Char a cters; but it 
has proved to be a durable Broad- 


way hit wife its maxveEoos lead role 
for an agifa . » m »gii> g and deft ac- 
tor, preferably Brit i s h. (947 0033). 

WASHINGTON 

Cabaret (Opera Hootse): Hal Prince 
again directs Joel Grey as fiie seduc- 
tive master of ceremonies to a 
Broadway-bound revival of the evoc- 
ative wnwnral of Berlin gte in the 
1930s. Ends Oct &. Kennedy Center 
(2543770). 

TOKYO 

Lea Htanrfdes. After London and 
New York, now^ Tokyo and the Japa- 
sese version of the Ibny-sward win- 
ning mmcfaai- The cast was hand- 
packed by the creative team of pro- 
ducer fmiwnn Mackin tosh (from 
an astounding 1L500 hopefuls), then 

trained for nine months in a special 
■geo for tnd rehearsed by director 
John Caird. C os t umes , set, sound, 
lighting have been supervised by 

fiie respective original de sig ner 
flown in from London. Toho’s les 
Uifiribles is a triumph. Hie best 
production c I a Western musical to 
Japan, it differs little from the origi- 
nal London version. Convincing and 
moving. ftl« top-quality production 
shows what can be achieved wife 
p roper Hating and training- Spon- 
sored by the cosmetics company, 
Rtowfo imperial Theatre, near 
Ginza. (201 7777). 


Have your FX 
hand delivered . . . 


. . . every working day, if you work in the business centres of 
LISBOA & PORTO 

0 Lisboa 887844 And ask Roberto Alves for details. 


Opera and Ballet 

NEW YORK 

New York Gty Opera: The week fea- 
tures Tosca, wife Elizabeth Hd- 
leque in fee title role conducted by 
Alessandro Skalianj in Frank Cbr- 
so's production, along with LaTravi- 

ata and La Bnhwmk TJnrato Center 
(H”**' ''O). 

friM Brown Company (CSty Crater): 
Carmen, in a csfiabontion wife Li- 


na Wartmuller, and Amertam prem- 
iere of Newark to collaboration wife 
Donald Judd are featur ed to Jh e 
toned programme of ^temporary 
danM 55th e. of 7th Av. (561 7907). 

TOKYO 

Antonie Gades Dance Troupe: Blood 
Wedding, Flamenco Suite, Carmen. 
Shiojuku Bunka Center (Thur). 
(2351661). 


A Village Romeo & Juliet/Beme 

Andrew Clark 


The new Berne production of 
A Village Romeo and Juliet is 
the fourth German - language 
staging of this problematical 
opera in the past six years: not 
a bad tarn of fortune for a 
work which had its premiere in 
Berlin 80 years ago and has 
managed only four British pro- 
ductions since Beecham’s per- 
formances at Covent Garden in 
1920. This sudden continental 
rediscovery of Delius (with 
Femrimore and Gerda also due 
for revival In North Germany 
later in the season) has less 
to do with a reassessment of bis 
peculiar style, than with the 
revival of interest in the 
forgotten and often discredited 
late Romantics, currently being 
indulged by opera theatres in 
the German-speaking world. 

It was certainly the romantic 
element in text and score that 
the Berne City Theatre har- 
nessed so freshly in this grip- 
ping and provocative staging. 
Romeo imd Julia <tuf dem 
borfe, as it is known in German 
after the novella by the Swiss 
author Gottfried Keller, came 
across here as a credible tale 
of adolescence in a narrow 
country community, its flower- 
ing. isolation and tragic 
apotheosis. In collaboration 
with Roderick Brydon, who 
drew from the orchestra a 
naturally-paced account of 
subtle dramatic colouring, the 
producer, Gian Gianotti, played 
up the poetic realism, stripping 
the stage of pretty operatic 
conventions and drawing vivid 


acting performances from a 
young and agile cast 

Gianotti always opted for the 
simplest solutions — a wise 
choice in this opera — ■ thereby 
maxi mi sing the power of sug- 
gestion in the mind of the 
audience. Instead of using 
stage decorations, the designer, 
Paolo Bemardi, created space 
and atmosphere by projecting 
a constantly evolving tapestry 
of light and colour on a vast 
semicircular backdrop. The 
lengthy musical interludes 

were used equally creatively to 
knit the drama from one scene 
to the next, enhancing rather 
than detracting from the 
muslco-dramatic impact of the 
score. 

In short the seamless integ- 
rity of this production illu- 
minated virtues in Delius’ elu- 
sive art which not even the 
much-praised Mackerras-Drese 
staging at Zurich achieved- 
Where the Berne production 
faltered was in the quality of 
solo singing (the chorus was 
excellent). Brydon did ail he 
could to make the voices heard 
above the orchestra, and the 
care devoted to phrasing, botii 
in the voices and orchestra, paid 
dividends. But the young Yugo- 
slav baritone engaged for the 
Dark Fiddler was a shadow of 
what was required. The Vren- 
chen, Barbara Fuchs, sang 
sweetly, and the unbridled mag- 
netism of her relationship with 
John Janssen's Sali made some 
amends for his imperfect vocal 
control. 



evvv A * 
X-r.V .. 






. k Y ."-'ll 


T^tik 


F IN A NCI AL TIMES 


BRACKEN HOUSE. CANNON STREET, LONDON EC4P 4BY 
Telegrams: Finantimo, London PS4.TeteX: 6954871 
Telephone: 01-248 8000 


Friday September 11 1987 


Brazil places 
a marker 


The debt crisis is the grumb- 
ling appendix of the world 
economy. Far from being a 
critical condition, however, it 
is a chronic complaint whose 
periodic flare-ups are treated 
with short term palliatives in 
the gloomy expectation that 
such palliatives will shortly be 
required again. 

It was the merit of the pro- 
posals of Brazil’s Finance Mini- 
ster. Mr Bresser Pereira, that 
in the case of his country, at 
least, he proposed a swift 
operation. Their drawback was 
that they came from the wrong 
source, at the wrong time and 
in the wrong form. The reaction 
from Ur James Baker, the 
American Treasury Secretary, 
and the commercial banks can 
have left Mr Bresser Periera in 
no doubt on these salient points. 


Interest payment 

Nevertheless, the decision to 
make the proposal, followed by 
its prompt withdrawal, may 
have done Brazil little harm, 
especially with the IMF and 
World Bank annual meetings 
coming up in just over two 
weeks. The minister has simul- 
taneously succeeeded in putting 
the notion of an explicit write- 
down of the debt into the heads 
of his country’s creditors, while 
showing his flexibility in with- 
drawing it under pressure. 

The market value of Brazi- 
lian commercial debt is now 
some 55 per cent of face value, 
the size of the discount partly 
reflecting the long interruption 
in interest payments. The 
Brazilian proposal was to con- 
vert half of the debt to the 
commercial banks into long- 
term, low-interest bonds, the 
coupon on which would have 
gone some, but not all the way, 
towards recognising current 
market values. Not surpris i ngly, 
the proposal has followed upon 
the heels of the general pro- 
visions against Third World 
debt made by many commercial 
banks. 

To accept such a fait 
accompli just before the meet- 
ings of the World Bank and 
IMF would seem wrong. 

Furthermore, any major 
change in the treatment of 
Brazil, the largest of all the 
debtors, can hardly be isolated 
from consideration of other 
indebted countries. Yesterday’s 


tion to freeze interest payments 
makes only too clear both the 
pressure chat is building up 
and the dangers of overnastj 
concessions in any one case. 
Brazil can play a valuable cata- 
lytic role, but should not be 
permitted on her own to deter- 
mine how the whole problem 
of developtag-country indebted- 
ness is to be handled. 

The most serious objection 
concerns the danger of reward- 
ing Brazil for her own misman- 
agement Brazil's debt is now 
trading so far below face value 
in large measure because of 
decisions taken by Brazil her- 
self. The effort made to gener- 
ate trade surpluses has been an 
impressive one, but other 
aspects of economic manage- 
ment over the past few years 
have been lamentable: the 
Cruzado Plan has turned out to 
be a textbook example of how 
sot to carry out a currency re- 
form; the public sector remains 
bloated, with its finances still 
under inadequate control: 
Brazil trade policies remain 
both protectionist and economi- 
cally inefficient; and. last but 
not least, Brazil has unilaterally 
determined to withhold payment 
of interest. 

Private Sources 


Alfonsin of Argentina’s inten 


In these circumstances 
Brazil's proposals inevitably re- 
mind one of the chil d who. 
having murdered his parents, 
throws himself on the mercy of 
the court as a poor orphan. 

Despite these objections, Mr 
Bresser Pereira has raised 
some important questions, to 
which the creditors and 
especially the governments of 
the major countries need i b find 
answers. The world economy 
looks no more likely thaw five 
years ago to produce the con- 
ditions for a revival of large- 
scale, voluntary net lending to 
the developing countries from 
private sources. The need to 
engage in frequent renegotia- 
tion of the terms of refinance 
still poisons relations between 
the developed and many 
developing countries. Whatever 
the accounting niceties, the 
economic distinction between 
the writing-down of debt, as 
proposed by Mr Bresser Pereira, 
and lending a country the 
money with which to pay one- 
self the interest is far from 
evident The time has surely 
_cure 

for the complaint 


A new deal for 
rented housing 


of 
even 
offer 


THE British Government's 
promised White Paper on 
housing, which is due in a few 
weeks' time, will do well if it 
fleshes out the details 
election promises and 

better if it manages to 

a broad outline of the necessary 
reforms of all aspects of hous- 
ing, public and private, rented 
and owner-occupied. The 
principal obstacle in the way of 
either objective is that no 
serious reform can be achieved 
without tunning the risk of a 
Sharp, possibly permanent in- 
crease in the level of public 
expenditure. 

This has given rise to some 
concern in the Treasury, par- 
ticularly in the area of deregu- 
lation of private rentals. If all 
tenancies were to be deregu- 
lated at once there might be 
a sufficient change in supply to 
keep rents down to reasonable 
levels following a period of 
-adjustment. But no political 
party could fight an election on 
the basis of taking away 
existing protection's, and the 
Government is unlikely to 
contemplate the removal of 
controls over current tenancies. 


owned by local authorities and, 
where they do, subsidies to 
tenants will probably Increase. 
The Bousing Corporation, 
which oversees the housing 
associations, is experimenting 
with a scheme that adds £30 of 
taxpayer's money to every £70 
of money raised privately for 
new housing schemes. This Is 
working, but officials are saying 
it would work a great deal 
better if the subsidy was set 
at 50 per cent. And Housing 
Action Trusts will not be able 
to function at all, let alone act 
as showpiece, unless they are 
provided with a substantial 
amount of up-front money. 


Public expenditure 

It is because of this dilemma 
that the new Housing Minister, 
Mr William Waldegrave, has 
addressed himself in a recent 
speech to the definition of 
subsidy. Should every area of 
the country be subsidised 


equally? If the answer is no, 
what 


Deprived areas 

Under the legislation that is 
likely to be outlined in the 
White Paper, landlords will in 
future be able to charge econ- 
omic rents and make a. 
reasonable return on their 
capital. It will be possible to 
evict tenants at the end of the 
lease. This market liberalisation 
will, however, apply only to new 
tenancies. The dear danger is 
that a larger number of private 
tenants will qualify for housing 
subsidies, at rents arrived at in 
the full knowledge that the 
state will foot the bilL 

The Cabinet faces much the 
same dilemma in its proposed 
strategy for transferring con- 
trol over Britain’s huge public 
housing estates from elected 
local authorities to private land- 
lords and self-appointed housing 
associations. There will also 
be an initial set of showpiece 
Housing Action Trusts which 
the Government will charge 
with the task of promoting and 
in part paying for better hous- 
ing in deprived areas. All this 
*s sensible enough, particularly 
in areas where the local council 
has manifestly failed to be a 
good landlord. 

. -Yet here again the means of 
paying for what is certainly an 
imaginative policy is unclear. 
Private landlords are unlikely 
t? find sufficient takers at a 
decent rental to account 
many of the 6m homes 


about the generally agreed 
desirability Of maintainin g 
some sort of social mix in 
specific areas? Can housing 
associations become a conduit 
for the provision of social rent 
support in a manner that keeps 
the level much the same every- 
where? Mr Waldegrave quite 
rightly wants to shift the pay- 
ment of subsidy from specific 
buildings to specific individuals, 
thus assisted tenants would pay 
rents that accoiined for a de- 
cent level of maintenance of the 
housing stock. Here again — 
which individuals? It is a mat- 
ter for debate whether tax- 
payers in general should finance 
tbe formation of new house- 
holds as a result of new social 
trends, such as the greater pro- 
pensity for young people to 
leave their parents’ homes. 


for 

still 


On the other side of tbe 
balance sheet, and beyond Mr 
Waldegrave’s jurisdiction, there 
remains the tax relief on up to 
£30.000 of an owner-occupier’s 
mortgage. Mrs Thatcher is 
committed to maintaining this; 
it is, nevertheless an addition 
to public expenditure that, 
once removed, might help fin- 
ance some of the reforms now 
being contemplated. Failure to 

tackle this subsidy, and the 
existing constraints on the 
supply of building land in 
areas of high bousing demand, 
serve to inflate the prices bid 
b v owner occupiers. This rep- 
represents the opportunity lost 
of providing houses for rent A 
rational housing policy cannot 
be restricted to the rented 
sector. 


Financial Times Friday September 11 - 



Hong Kong may have the political jitters but, says David Dodweil, the colony S powerful 

neighbour is helping to fuel dramatic economic growth 



“T* 


IS 


HE ECONOMY 
iobviously a tittle bit 
overheated at the 
moment, but it will probably 
correct itself.” said Piers 
Jacobs, Hong Kong's Financial 
Secret ar y, last week, in the 
hearty vein of a Saturday after- 
noon sailor wandering into a 
typhoon. 

In similar cavalier style, the 
Government has just admitted 
an error in its calculation of 
economic growth last year. Or 
rather, it has yet to admit the 
error, but has released statistics 


A boom 


made in 


that show real growth in gross 
domestic product in 1986 of 11 
per cent. 

For the past five months, 
since Mr Jacobs’ budget speech, 
tbe people of Hong Kong had 
thought economic growth was 
8.7 per cent How the Govern- 
ment managed to make such an 
error has yet to be explained. 

The un disputable fact, how- 
ever, is that Hong Kong’s 
economy is enjoying an upsurge 
the like of which has not been 
seen for a decade. Exports in 
the first seven months of the 
year were some 40 per cent 
ahead of exports for the 
equivalent period of 1986. 
companies are reporting 
improvements in half year 
profits of anything up to 80 per 
cent and order books are full 
enough to keep tbe growth 
going for at least the rest of 
the year. 

The result has been a rise in 
inflation— consumer prices last 
month were up about 6 per cent 
on August last year — and the 
territory's worst ever labour 
shortage. Unemployment is 
recorded at only about 1.8 per 
cent 

It has also caused confusion 
among foreign investors and 
Hong Kong's trading partners, 
who have been told repeatedly 
over the past three years that 
Hong Kong is a “jittery city,” 
creeping nervously closer to 
1997 when Peking will regain 
sovereignty after almost 150 
years of British colonial rule. 

The contradiction is more 
apparent than r eaL There is 
still ample evidence of nerves 
about the future and there 
appear to be good reasons why 
these nerves should have played 
a part in fuelling the hectic 
growth. 

The first reason might well 
be called the making-hay-whOe- 
th e-sun -shines factor. “ Most 
local manufacturers would say 
there are two * fortune ’ cycles 
between now and 1997,” says 
one bank economist "No matter 
how gloomy a manufacturer 
may be about 1997, he knows 
he would be a fool not to 
capitalise oh at least one of 
them .** 

Mr Allen Lee. a legislative 
councillor and head of an elec- 
tronics company, is well aware 


China 



Hona Kong and major competitor** currencies, 
a gainst g a w ndH ot'Hong Kong's major markets 

6 mourn* todd/6/sf 

Dollar 


D-Mark Yen 


Hong Kong $ 


the grounds that it critically 
underpins local confidence in 
the future. 

As the US currency has 
fallen in value against cur- 
rencies worldwide, so the Hong 
Kong dollar has fallen with it 
giving local manufacturers an 
invaluable fillip in their efforts 
to export to Europe and Japan. 
In tiie first half of 1987 alone, 
the Hong Kong unit fell by 8.2 
per cent against the yen, 6.1 per 
cent against the D-mark and 8.6 
per cent against sterling. 

An additional bonus has been 
US success in forcing the 
Taiwanese, South Korean and 
Singaporean Governments _ to 
revalue their currencies a gains t 
the US unit This has given 
Hong Kong companies a price 
advantage against their fiercest 
competitors, both in the critic- 
ally important US market and 
worldwide. 

The result has been a 42 per 
cent leap in domestic exports 
to West Germany, up from 
HK$ 4.57bn (£352.9m) in the 
first half of 1986 to SHK 6fibn 
this year. Exports to the UK 
have risen 28 per cent (from 
HK$ 4.21m to HRS 5.4bn) and 
there has been a 71 per cent 
rise in exports to the 
notoriously diffic ult Japanese 
mar ket (up from HK$ 2.4bn .to 
HK$ 4.1bn). 

These increases came after 
similar export growth in 1985 
and 1986 and would in normal 
circumstances have been ex- 
pected long ago to generate 
signs of serious overheating of 
the economy. 

Hong Kong, however, is not 
growing in norma] circum- 
stances: the abnormal factor is 
(Thin* . 

The inflationary pressures 
and labour shortages that would 1 
have merged long ago in other 
countries experiencing si milar 
growth have been ameliorated 
the Hong . Kong 


_ by what 

poli tical . rmrvn nmpcK amn-n tf. Government- Cal ls the OUtWaia 

him. “But business must con- processing trade with China, 
tinue.” he insists. “There are 
very few who are actually pull- 
ing out, bat there are plenty 
who are accumulating what they 
need to get an insurance policy 
somewhere. 1 ' 


A second reason, and perhaps 
Govern- 


the most potent, is the 
menfs determined adherence to 
an exchange rate link with the 
US dollar. This was introduced 
late In 2983 when a bout of 
politically induced hysteria over 
1997 threw the exchange rate 
into a spin. The dollar link has 
been kept in pace ever since on 


Inflation has been suppressed 
by tiie fact that most toy and 
electronics manufacturers and 
a large number of textile and 
garment companies have turned 
to the Guangdong hinterland — 
a 150-mile stretch of river delta 
running north from Hong Kong 
to Canton — to tap cheap sup- 
plies of labour that have kept 
production costs down. 

This explains much of the 
apparent growth in trade be- 
tween Hong Kong and China 
over the past two years. Exports 
to China in the first half of 1987 


were HK$ 12.4b n — an inc rease 
of 69 per cent on the HK$ 7.3bn 
•figure to June 30 last year. 

Most ofthe increase was made 
up of electronic components or 
semi-manufactured goods, which 
are assembled in Guangdong 
and then sent back -to Hong 
Kong as finished gods. Not 
surprisingly. China's exports to 
Hong Kong have grown by simi- 
lar proportions. 

Raymond Hong's applied 
electronics, which makes a wide 
range of computerised toys, is 
not untypical In employing 5,000 
workers in different factories in 
the Pearl Biver.detia, and. only 
200 in Hong Kong. Materials 
are supplied to his Chinese fac- 
tories and finished products re- 
turned to Hong Kong. Staff 
there concentrate on design, 
quality control and marketing. 

A city like Dohgguan. two 
hours' drive from Hong Kong’s 
land border with China, has 
about 1,600 factories . either 
processing for Hong Kong com- 
panies or in co-operative ven- 
tures with them. Hong Kong 
production accounts for an 
estimated 150,000 jobs in a city 
of 

Similar pen e t ra t ion of r the 
Guangdong economy has 
oc cured in cities like Foshan. 
Zhongshan, Panyu, Shunde, 
Jiangmen and Taishan, with 
officials in Guangzhou, the pro- 
vincial capital, estimating that 
about .10,000 factories and no 
less than lm workers are 
employed in production in Hong 
Kong. _ ' 

Wtth Hong Kong^s own 
manufacturing labour force pot 
at only just over lm, this means 
that half tbe territory’s manu- 
facturing workforce is now 
inside China. : 

For Hong Kong manufacturers 
facing 1997, the Chinese option 
has many attractions. Not only 
does it keep wage costs down, 
but ft has enabled them to win 
favour with Chinese o ffici al s 
who. have welcomed, the invest- 
ment and the job' creation. Such 
goodwill could provide vital 
insulation if the political mood 
in China chills after tiie transfer 
of sovereignty. 

The development has also 
allowed Hong Kong manufac- 
turers to avoid heavy invest- 
ment in labour saving 
machinery— investment that 
would long since have been 
essential if they had had only 
the Hong Kong labour force to 
draw on. 

. " For a factory boss worried 1 
about 1997, the -last thing he 
wants to do, if he can avoid it. 



- 8 . 6 % 


- 8 . 2 % 


Singapore $ 


+ 2 . 1 % 




n 

i r 

r 



1 

-4.0% 1 

I 

• • ; 

• - 

-6.6% 

-6.2% 


+&5% 




Korean Won ' 

- 

I i - . 

+0.1% 


. . +13.6% 

n 

-2.5% 

L 1 

-2r1% 



- ; 

+6l8% 




+4.0% 1 

1 1 +4-4% 

New Taiwan $ 


u 

1 

I 

L 


Soman Hang Kong Carwus and SSMMBcs Papwtmw* 


Hong Kong's corporate 
a fto Hax profits bi HK$ 


1.41m 

FbsHidM9S7 



Windsor 

Industrial 


Hutchison 

Whampoa 


.. Mia 
Pacific'. 

SMcaiGoRijMngi 


is commit large sums of •money- 
to new equipment” one indus- 
trialist says. “ Better to add 10 
more workers, who can be laid 
off if the ro^ticat mood turns . 
ngly, th&r wife 

expensive machinery that canT 
be moved- anywhere.” - 

An exception has been Hong 
Kong's large knitwear industry, 
which has been forced by US’ 
country -of -origin legislation to 
torn its back on outward pro- 
cessing in Guangdong. Thus it 
is the knitwear manufacturers 
who have been most forcefully 
hit as tiie labour shortage has 
begun to bite. 

The Hong Kong Federation 
of Industries claimed last week 
in a letter to Mr David Ford, 
head, of the territory’s Civil Ser- 
vice. that textile and cl o t hing 


industries were, short of 80,000. 
workers. Worst hit were cotton 
spinning and weaving factories 
where shortages had forced op 
jngpthly\ salari ^by about ^ 

Disputing .government argu- 
ments that the shortage ought, 
to provide impetus for techno- 
logical- - upgrading- and that 
higher wages were not 
unacceptable, given the massive 
profits growth recorded . by 
most companies, the federation 
has called for radical measures 
to tackle the labour supply 
problem. .. . 

Its favoured. option is for the 
Government to. allow the 
recruitment of . workers from 
overseas, from south-east Asia, 
or perhaps China, on a basis 


similar to -the current recruit- 
ment of maids .from . tiie 
Philippines. The second is the 
'setting up of an industrial agfa 
on . the border with China; with 
workers from the. 
being bussed into the. zone 
daily, or for one of the existing 
industrial zones to be expanded 
on similar terms. . . ... . 

Finally, tiie federation- points 
to the possibility of allowing 
Vietnamese refugees,'- about 
-8,000 of whom are. currently 
held in dosed - campfr -in' Bong 
Kong, to join the workforce. ;■ 

All these options have been 
cold-shouldered by tiie Govern- 
ment, . not least because :&~is 
skilled 1 and not unskilled 
workers that are in shortest 
supply and these cannot be Im- 
ported easily from any country 
in the region. - 

A senior government econo- 
mist says: “Apart from the 
immense practical difficulties 
attached to all these' sug- 
gestions, we think this is go^hg 
to be a short-term problem ’add 
we should not be looking kt 
long-term solutions that lock os 
into investments that we might 
not want to afford in the lqhg 
term.” 

It was the conviction that the 
problem was a short-term one— 
and that the growth surge 
would naturally run out . of 
steam once labour and other 
infrastructural constraints 
began to exert themselves — 
that prompted Piers Jacobs* in 
April to predict economic 
growth this year of around 62 
per cent 

Officials now admit they 
understand the extent to which 
local manufacturers ; could 
exploit mainland China • to 
sustain their impressive export 
plans. 

“We were 1 expecting tiie 
squeeze to start showing at the 
beginning of the year, but- it 
didn't happen," says a govern- 
ment economist. “ It has to slow 
down sometime and who knows 
- how many times we are going 
to get it wrong before we get 
it right” • _ . • . A 

Signs from 1 - China suggest 
that the squeeze is almost upon 
Hong ' Kong manufacturers. 
Officials in cities throughout 
the Pearl River delta are 
reporting that local wage levels 
have begun to rise rapidly as 
their own labour pools begin 
to shrink. Many are bringing 
workers in from as far. afield 
as Anhui and -Henan, UB00 
miles north in the— Chinese 
interior. 1 

In 10 - days’ time, • Piers 
Jacobs will make his half-yearly 
assessment of tbe .economy's 
performance. If current trends 
were expected to continue to 
the end of the year, he would 
be pointing to economic growth 
in real terms of between 13 
and 16 per cent More realistic- 
ally, however, he will 1 probably 
be predicting^growjh ^in^tbe 
region of 10 -dr 11 per- cent 
. He may also be making „the 
first .official admission of, fee 
extent to which Hong Kong’s 
economy has been Integrated 
with that of its Chinese hinter- 
hmd. 1 

It would be a small step to 
concede * that 1 the transition 
many had though would ocftxr 
in 1997 has already taken 
place for many manufacturers. 
If they are anxious now, ft is 
not because of fears about 
what China might do after 1997, 
but because their fates are 
already in the hands of Peking. 


■tv 


Abboud at 
First City 


Jt anybody cm put First 
City Bancorp back on its feet, it 
is A. Robert Abboud, bankers 
say. But he may have to 
smooth Ms rough edges. Tbe 
58-year-old Boston banker, who 
has promised to raise $500m to 
save the washed-out Houston 
banking group, has a reputa- 


tion for being_ difficult to get 


along with. " People think 
“ A " in A. Robert Abboud 
stands for abrasive,” he said in 
an interview in 1984. . 

That led to trouble at First 
Chicago, where the Harvard 
graduate started as an assistant 
cashier in I960 and worked his 
way up to chairman. The bank s 
board booted him out in 1980: 
his conservative policies were 
not bringing in the profits mid 
be was unpopular with senior 

joined Occidental 
Petroleum, but left in 1984 
after falling out with the oil 
company’s autocratic chairman. 
Dr Arm and Ham mer. 

History has been kinder to 
Abboud than his cntics. When 
be took over at First Chicago 
in 1975, he shook out tbe bad 
real estate loans and staunched 
other problems by clamping 
down bard on lending. Across 
the street Continental Illmois 
•was growing fast and making 
big profits, to the envy of 
Abboud’s colleagues. But when 
Continental Illinois had to be 
rescued in 1984. Abboud’s 
caution at First Chicago was 
vindicated. Can he repeat the 
trick with the bad real estate 
and energy loans at First City? 


Civil words 

yw morale, poor salaries rela- 
_.e to the private sector, 
increased politicisation of 
appointments and a poor public 
image — not a snapshot of the 
British civil service, but of their 
American colleagues, according 
to Paid Volcker. 

Now that “Tall Paul” has 
relinquished die reins of power 
at the Federal Reserve Board, 
he has found a new crusade : a 
group called the Commission on 
the Public Service, dedicated to 


Men and Matters 


Improving tiie dot of America’s 
career civil servants. 

Launched yesterday in Wash- 
ington, the group will seek to 
promote the Interests of public 
service with all of the Presi- 
dential candidates over the next 
18- months. In an election that 
is likely to see more titan its 
fair share of Washlngton-bash- 
ing, Volcker has a tough time 
ahead of him. 


But now free from the con- 
straints that prevented him 
from expressing a view on such 
matters when in office, he is 
clearly intent on making his 
point. High-minded as ever, he 
says he sees a “ quiet crisis ” in 
the . making, though — with 
jittery financial markets doubt- 
less still in mind — he hastens to 
add feat the Fed itself is 
“somewhat isolated” from the 
pressures that face its peers. 


Getting there 


Now that tiie shock wave from 
Big Bang has passed. Sir 
Nicholas Goodison. chairman of 
the Stock Exchange, has re- 
started his regular trips across 
the north-south divide to meet 
the people who run listed com- 
panies in the regions. 

Goodison usually invites 
around 40 to a questioo-and- 
answer session about the latest 
from the Stock Exchange, 
followed by a buffet supper. 

He suspended the get- 
togethers while everyone was 
adjusting to Big Bang. But this 
week he was in Manchester 
reporting how pleased he is by 
its aftermath. 

His only worry seems to be 
a lack of feedback from listed 
companies about the exchange's 
publications. Interchange, and 
the Quality of Markets. 
Quarterly, both of which were 
included in a hefty information 
pack for the people at the 
meeting. 


As people pored over these 
journals, realisation dawned 
that many were seeing them for 
the first time. Goodison changed 
tack : how best could the Stock 
Exchange ensure that such 
things got past a senior man’s 
secretary, and actually reached 
him? 

“No chance," muttered one 
chief executive, whose secretary 
is under Instructions to throw 
any package of printed material 
weighing more than three 
ounces straight into the bin. 

Another however, proposed 
what could be tbe perfect solu- 
tion. He suggested to Goodison 
that material be sent in pastel- 
coloured, - scented envelopes 
with names and addresses hand- 
written in exotic-coloured ink. 

Any secretary with a sense of 
discretion would _ pass such 
.correspondence straight through 
‘unopened, it was argued. 

-A thought advanced during 
the evening was that adding a 
scrawled “Strictly Private and 
Confidential” would make 
onward transmission absolutely 
certain. 


Family politics 


(hie of the grand old men of 
Danish, politics, Erhard Jakbsen. 
aged 70, who founded his 
.centre-democratic party an fee 
1970s after breaking with his 
old pasty, the social democrats, 
will form a father- and- 
daughter team i in Prime 
Minister Pool S chi liter’s new 
coalition government. 

This Is the first time that 
Erhard, as be is fondly known 
to everybody, has been given 
a Cabinet job, though his 
daughter, Mimi Stilling 
Jakbsen. was first minister of 
culture and then social affairs 
minister In the previous 
coalition. 

Erhard Jakbsen is one of the 
most enthusiastic Danish sup- 


porters of the EEC and NATO, 
and one of the country’s most 
fiery speakers. 

But when he was .a member of 
the European parliament his un- 
Nordic contributions went al- 
most unnoticed among the floods 
of Gallic enthusiasm. 

. His job in the new govern- 
ment is minister of co-ordina- 
tion, between the four coalition 
parties. It is a role which he 
has played from outside the 
cabinet before. 

His talent for getting people 
to work together has much to 
do with the fact that there were 
remarkably few serious dis- 
agreements during the five 
years of Schluteris coalition. 

Daughter Mimi, brought up 
in a home where politics was 
about the only serious subject of 
conversation, was first elected 
to the Folketing 10 years ago 
at the age of -28. ■ 

After a successful term as 
minister of culture she was 
promoted to the big spending 
social affairs ministry. Politic- 
ally she does not seem to be 
able to put a foot wrong. 

She is divorced and has a 
small son. And it certainly did 
her reputation no harm with 
the broadminded Danish public 
when it slipped out during tiie 
election campaign that she is 
the live-in companion of Bengt 
Burg, presenter of a popular 
early -morning radio programme. 

Tbe spark was struck when 
she phoned him “on-air ” one 
day to thank him for a compli- 
mentary reference in his radio 
programme. 

Perhaps that romantic toneb 
to an otherwise boring election 
campaign ..-explains why the 

centre democrats were the only 
coalition party to make a gain 
in Tuesday’s election, going 
ahead from eight to nine seats. 


Junior partner? 


A reader has noticed what he 
calls a sign of the times in the 
City of London. 

At a parking meter in Great 
Winchester Street yesterday 
was a new BMW with a scribbled 
notice ’on the windscreen, 
"Meter Jam bed.” 


Observer 




M A G N A 


H * O ’ U • S ’ E 

ABACUS DEVELOPMENTS LIMITED 


STAINES 


This impressive newfy completed headquarters 
building is situated in a prime location in the centre 
of Staines, Communications are excellent with the 
M3, M4. M25 and Heathrow and Gatwick Airports 
within easy reach. 


AMENITIES 


O Full air conditioning O Energy-saving bronze 
double glaring O Magnificent entrance atrium O 
Raised floors throughout O Three passenger fife 
O 163 on-site parking spaces 


•■S'. 


Bin 


sen 








ACCOMMODATION 


Total.net floor area is 43.40Qsq ft divided as follows: 


Fourth J : ft^or 


Thi^dFlQOr 


8.300 sq ft 


Second Floor 


RrstFloor 


8,750 sq ft 




Ground Floor 


8,250sqft 


9.330 sj ft 


TOTAL 


43,400 sq ft 


SOLE AGENTS 


Kp^^ Fronk k»*®wiRQAij 

IS & Rutfey 0 M 298 m 








21 


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Financial Tunes Friday September 11 1987 


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m jwtm# 

period as Ghatemaa of the 
British Cotflfervafiye P&rty i* 
drawing peacefoBy -to .« close. 
Mr TebWt.has vtp&ty left the 
Cabinet athls own requestwnd 
is complefinu *h analysis tf 
this year's general election 
respite for a yet unnamed 
successor, 

■ By and lairge, heaehfevwt 
what he set out to do. He tar- 
lieted the rlghtsegjs for specif 
attention. Oat of a total' of 
around 70 which he believed 
the Tories had either to hold 
or regain in order to win the. 
election quite comfortably, only 
18 were lost — three' of which 
were in Wales and seven in 
Scotland. ' 

His outstanding pfafarmanco 
was to help mobBtee Jfinfetera 
to pot up a strong .Showing at 
'last year*s party conference. 
The Government ' had been 
going through one of its worst 
periods , in the first: half of the 
year what with Westland, Bfi 
-and the dropping of the Sunday 
trading provisions. It - came 
bacds at ' the conference with 
Ministers, in a united approach, 
outlining achievements so far 
and promises of what was to 
come. That Was the political 
. turning point. 

..Some of the tensions that 
arose afterwards are buBt into 
the relationship between Con- 
servative Central Office and the 
Prime Minister, and owe a hit 
to there not being fixed-term 
Parliaments. Central Office is 
always nervous about the elec- 
tion timing; it does not want 
to peak too soon nor start too 
late, yet it does net have the 
final say about the date. It 
knows that it wQl inevitably 
he blamed If things go wrong. 

There , was also, perhaps 
especially In Ur Tebbtfa case, 
a problem about the Central 
Office role in poEcy-maktag. Ur 
Tebbit is an ideas man rather 
than an orguusatibn man. He 
would have liked Hr$ Thatcher 
to have drawn ‘ op plans for 
wi descale Changes fa the rnadi* 
faery at government, bat she 
would have none of & at least 
until the next stage of privat- 
isation is complete. That left 
him vulnerable to the charge 
that he was more. interested in 
or ganising Central Office. 

The . tensions between the 
party headquarters and the 
Prime Minister are iikdy to con- 
tinue whoever succeeds . -hist. 
The theory-ifr— and nobody has 
effectively challenged it— -that 
you put fa- a relatively low level 
or parttime figure between gen*' 
end elections, then fnstal some- 
one bigger about two years -be- 
fore the next electkfi Is due. 

The trouble is that the low 
level or part-time figpre lacks 
the authority and the time to 
impose reforms on the organisa- 
tion ^ and the high level 
figure might be a rival to the 
Prime Minister. - It is difficult 

to see a way out of this dilemma 

so long as Sto ..Tfealcher 
remains, since even tad 


Ptilitits Today 


Wanted 
a new 



By Malcolm Rutherford 


Thorneycroft, who had no 
possible claim ou the leader- 
dip, was dismissed as Chair- 
man when he became mildly 
critical of her policies. 

Nevertheless, Central Office 
enjoys one inestimable advant- 
age over its rival organisations 
in other parties, it keeps its 
eyes on the constituencies. 
When the results of one general 
election are ip, it starts plan- 
ning for the next, noting the 
parts of ' the country where the 
party could and should have 
dozm better. 

This is not an easy exercise, 
for the constituency organisa- 
tions are jealous of their 
autonomy mid. on the whole, 
support Central Office financi- 
ally rattier than the other way 
round. There is not even a 
central record of party mem- 
bers. Thus the power of the 
central organisation to inter- 
vene at the constituency level 
is very limited. Even an attempt 
to persuade a constituency 
party to employ a better agent 
or modernise its filing system 
might be resented and resisted. 

What has developed over the 
years, however, and is now 
likely to be strengthened, is an 
effort to encourage neighbour- 
ing constituencies to work more 
Closely together and to place 
resources where they are most 
needed. 

Completion of the task will be 
impossible. .The solid Conserv- 
ative seat of Beaconafield in 
Buckinghamshire, for example, 
is reckoned, to have one of the 
best— and best paidr^-agents in 
tiie country; maybe that is why 
the Tory majority is so large. It 
might he better if the agent 


were employed in the Midlands, 
but that is not going to happen. 

Still, there are areas where 
changes can be made. Plymouth 
has three constituencies, two 
held by Tories and the other 
by Or David Owen of the SDP. 
The Plymouth Conservatives 
have agreed to a combined 
organisation and common head- 
quarters. (Zt is rattier an ironic 
place to choose since the Tories 
might have to decide whether 
or not fa oppose Dr Owen at 
the next election.) 

Another instance of the 
organisation beginning to cross 
constituency boundaries con- 
cerns Mr Tebbit’a own seat of 
Cfacgford in Essex. The Con- 
p gr v a tiv os gained tfafe neigh- 
bouring seat of Walthamstow at 
the general election. The next 
aim is lo pick up the other 
neighbour. Leyton; if success- 
ful, they would then hold til 
the seats fa the Waltham 
Forest Borough. 

{Similar co-operation is being 
considered fa some of the 
major cities, even those where 
the Tories did well, such as 
Bristol {three seats out of four) 
and Birmingham (five out of 
ten). Newcastle upon Tyne, 
which no longer has a Tory UP, 
is likely to be given special 
attention. 

The aim generally is to 
extend the Conservative push 
to new frontiers. The political 
geography after the election 
showed that the Tories had 
done well in the aouth. includ- 
ing Tr ATHfa*! and the Midlands, 
but bafily fa the north, Scotland 
and. fa some extent, Wales. 

The voting patterns be 
broken down in more detajL 
The Conservative Central Office 



nr '*v%‘i r-t _ 

Tebbit: an Ideas rather than organisation man. 


analysis is that someone who 
lives in a council bouse, is 
employed in the public sector, 
belongs to a trade union and 
owns no shares tends to vote 
Labour. Such people are con- 
centrated in the north. 

The Conservative voter tends 
fa own his or her own house, 
work in the private sector, may 
or may not belong to a union 
(this criterion is no longer as 
important as it was) and to 
hold shares. This sector is con- 
centrated fa the south and is 
growing. Under Mrs Thatcher's 
Government it should continue 
to grow and expand northwards 
as more and more people move 
into the private sector and 
become shareholders. 

Thus the Tory goal at the 
n ert election should be to mop 
up more seats fa London, move 
further north and retrieve the 
situation fa Scotland where 
there have already been exten- 
sive changes in the party 
organisation. Mr Tebbit would 
add, as a word of advice to his 
successor : that at the same 
-time it wiU be essential to 
maint ain the policy momentum; 
for it is from the growth of the 
private sector and from wider 
ownership that the Tory vote 
fr»g come. He would also see 
the Tory qim pot so mueb as 
grin n i ng more seats as winning 
more votes, more evenly 
spread around the country. 

If all that sounds vastly over- 
simplified as a plan for the 


Tories to win again, of course 
it is. It omits what happens if 
privatisation turns sour. 
(Recent events at British Tele- 
com would have provided an 
interesting background if the 
general election had been 
October not June.) It overlooks 
what might come of the new 
party that might be born of the 
Liberai-SDP Alliance and it 
totally ignores how the Labour 
Party might develop. 

Moreover, sooner or later — 
probably about mid-term — 
there is almost bound to be a 
huge fit of nerves fa the Tory 
Party about whether Mrs 
Thatcher should stand again or 
step down. One can already 
sense the discussions beginning. 

Nevertheless, a party that 
keeps its eyes on the constitu- 
encies and is continually trying 
to improve its organisation has 
a huge advantage. It will be a 
long time before even a regal- 
vanised Labour Party can take 
on the Tories in the south, yet 
the Tories are already moving 
north. The Liberals can do it 
but largely fa by-elections when 
they simply pour all their 
resources into one place. 

That is why the succession to 
Mr Tebbit is important It 
means someone who is close to 
Mrs Thatcher, but can also 
stand up fa tier — who can 
organise as wefi as Chink. There 
are precious few candidates 
around, 


West Germany’s state elections 

Strauss awaits news 
from the north 


NOTHING IS ever supposed to 
happen In Schleswig Holstein. 
Flat, almost to the point of 
being romantic, and perched 
alone at the top of West 
Germany, the state's door 
inhabitants are the very 
epitome of German Gruendlichr 
keit and good sense. 

They seem also about to 
become the vehicle of 
Chancellor Helmut Kohl’s next 
political embarrassment. State 
elections are being held here 
—and in the city state of 
Bremen * further south— on 
Sunday and Mr Kohl’s Christian 
Democrats (CDU) seem certain 
to lose their majority in the 
state parliament and, with it, 
their majority fa the Bundesrat, 
the upper house of the Federal 
Parliament fa Bonn. 

The CDU will then have lost 
support in almost every state 
(and one national / election 
since Mr Kohl was first elected 
fa power in 1983. Worse still, 
losing a majority fa Schleswig 
Holstein after ruling there for 
37 years would leave the 
balance of power in the 
Bundesrat in the unpredictable 
hands of the Bavarian leader, 
Mr Franz Josef Strauss, Mr 
Kohl’s senior coalition partner 
and his most relentless critic. 

It is also possible that new 
regional alliances will emerge 
between the federal oppo sition , 
the Social Democrats (SPD), 
and the liberal Free Democrats 
(FDP), junior partners in Mr 
Kohl's coalition, which could 
further undermine Mr Kohl’s 
fractious Government 

Certainly Mr Kohl takes the 
Schleswig Holstein poll 
seriously. It has a lot to do 
with his change of heart last 
month when be finally offered 
to scrap West Germany's 72 
Pershing 2A nuclear missiles in 
order to help the US and 
Soviets conclude an arms deal 
in Geneva. 

That has not stopped the CDU 
fa Kiel from panackfag. Last 
week it gave a warning fa 
hysterical pamphlets and elec- 
tion "newspapers” that if the 
SPD was given half a chance, 
it would form a Government 
with the radical Greens environ- 
mentalist party. 

Cars would then be 
abolished. Foreigners (read 
Turks) would be given the 
vote. The police would be dis- 
solved and prisons emptied. 


By Peter Bruce in Kiel 

Abortion would become avail- 
able up to the moment of birth 
(and be chargeable to the 
national health) and sex with 
14-year-olds would be made 
legal. 

This kind of campaigning is 
a far cry from the nice-guy 
image that the state's young 
Premier, Mr Uwe Barschel, 
likes to project But since being 
injured in an air crash earlier 
this year he has not been his 
old, buoyant, self. 

Mr Barschel quickly apolo- 
gised for the sex claim, but that 
did little to subdue suspicions 
that someone in the CDU was 
trying to nobble the SPD's lead- 
ing candidate by spreading 
other dark rumours about him. 
Including an old German 
favourite, tax evasion. 

The SPD challenger, the 
handsome and charming Mr 
BjOra Engholm has gone down 
so well an the state that Mr 
Barschel risks losing not only 
his majority but being removed 
from Government altogether. 

Recent polls give the SPD 
about 45 per cent of the vote, 
about two points ahead of the 
CDU. In the last state election 
in 1983 the SPD collected just 
43.7 to the CDLTs 49 per cent. 
Dr Klaus Rave, the SPD’s cam- 
paign manager, says Mr Eng- 
holm will try to form a Govern- 
ment even if it means talking to 
the Greens or the FPD about a 
coalition. 

The CDU is fa trouble fa 
Schleswig Holstein because it 
is losing its grip on a once 
fiercely loyal fanning vote — 
more than 10 per cent of the 
electorate. The Kohl Govern- 
ment fa Bonn is being blamed 
for not stopping EC farm pro- 
duce price cats earlier this 
year. Mr Karl Eigen, a federal 
CDU MP and head of the 
farmers’ union in the state says 
Brussels* farm policies threaten 
to drive up to 50 per cent of 
farmers off the land. 

"A 10 per cent cut fa turn- 
over can mean a halving of 
profit," he says. The trouble 
with being a German farmer, 
says Mr Eigen, is that “ we are 
the weakest element of a strong 
economy.” He fears the farmers 
may stay at home in protest 
on Sunday despite a massive 
CPU effort to mobilise them. A 
break-away, right-wing, voters’ 
association Is also trying to woo 


the farm vote, which will not 
do the CPU any good either. 

Mr Barschel will probably 
need FDP support if the CDU 
is to have any chance of stay- 
ing in Government In fact fa 
order f o try to secure it be 
has offered to bring the FDP 
into a coalition even if he wins 
an overall majority. The FDP, 
in tun, has promised the CDU 
support. 

None of which means very 
much. Though it is likely the 
liberals will win 5 per cent or 
more of the vote and get into 
the state parliament it is not 
entirely certain that the leader 
of the FDP in the state, Mr 
Wolf-Dieter Zumpfort, speaks 
for the party. The SPD’s Dr 
Rave calls him a "primitive 
neo-capitalist” and says there 
are other FDP leaders the SDP 
would talk to about a coalition. 

Also, the FDP is notoriously 
opportunist and has just 
formed, fa Hamburg, the first 
coalition with the SPD since 
it abandoned Chancellor 
Helmut Schmidt fa 1982 and 
brought Mr Kohl to power. The 
SPD and FDP also seem likely 
to form a coalition fa Bremen, 
where the socialists may lose 
their overall majority on Sun- 
day. 

The Greens have also offered 
the SPD support but they also 
have to cross the 5 per cent 
barrier first. That means taking 
enough votes away from Mr 
Engholm, who is left wing on 
most issues but in a gentle, 
pipe-puffing way that has not 
frightened off the quiet nor- 
therners. "Schleswig Holstein 
has always been difficult for the 
Germans because of the left- 
wing SPD,” says Mr Hefao 
Schomaker, the party's election 
manager. 

The prospect of having a 
watered-down CDU government 
in Kiel — let alone an SPD 
one — and the failure to make 
much out of tiny Bremen's 
DM 2m-a-day debt repayments 
threaten to make Monday 
miserable for the Chancellor. 
Not least because Mr Strauss is 
bound to leap for the ump- 
teenth time upon any CDU 
losses as evidence that Mr 
Kohl does everything wrong and 
that he should pay closer atten- 
tion to the advice he gets from 
Bavaria. 


Fundamental 

■"jwsrareb 

professor V. Heine, FSB 
S r,— Much of Sir Trevor 
Sheet’s letter (September 8) 
about British participation fa 
CEBN (European Organisation 
for Nuclear Research), makes 
good sense. Of all subjects jt 
ought to fie pursued through 
- .international ; collaboration be- 
cause qf its enormous expense. 
There is, however, . bnc haste 
issue about the need, for funda- 
mental-scientific research which 
he has simply'gof quite wrong. 
F undamen tal research now is 
important for technology to- 
morrow, hut ant .-any kind of 
fundamental research. There is 
no conceivable way fa which 
the fundamental un derst anding 
being pursued- at ,CE$?$ caq 
feed Into technology for ever. 
Even tiie word - v nuclear ” fa 
the CERN title is a misnomer. 
There are honest * Ways - for 
scientists to argue, for money 
from public foods, out to point 
to technological benefit fa this 
ease fa fat one of them- 
There are two points to he 
made- The first is that there 
has to be some degree of selec- 
tivity fa fundamental research 
as in other fields of endeavour, 
One must nut. draw lines, too 
tightly because by definition 
the object of research is to find 
whaf has not yet been, dufr 
covered- The technique is to 
refert' broad fields- which are 
relevant' to technology. Fields 
more remote from application 
are not ignored: they are pur- 
sued at a lower level of activity 
and only at tile highest intel- 
lectual level. The very large 
aim still- going into high energy 
partiefe physics (which Ja- done 
by CERN) -does not conform to 
thin strategy. 

: The second ppfat ig that fas 
.present misffiloeaifoa .of the 
research budget tor basic 
Science is starving those areas 
Which really do have tedfaO* 
logical importance. Readers wul 
Know that' there' has been a 
-renewed brain drain in -recent 
years because, of .dfc$ nSi, fa' 
ment about the support of baric 
research. It seeins as if Britain 
‘does not understand on what 
aide its bread is buttered. High 
energy particle physfas la net 
the only area : that re- 


Letters tothe Editor 


(PfoD'VoBcer Heine. ,, 
cppwfa.L ffi wton fc . 
jfaifrgfefr Said, Cambridge^. 


.Itfs people 
that matter 

Prom the Director, ; 

Industrial Participation, 
Association 

Sir, — I was. very interested 
to read (September 8) Tffieut 
the launch of the Ethical 
fa particular I Impressed 
-at the reference to- “wen-rim 
companies with a fastpiy of 
good industrial relation*.” - * 
'-r 'How ' infrequently is: much 
attention given to tiie way fa 
which companies manage their 


people when assessing their 
worth. - Companies are bought 
and sold, broken up and amal- 
gamated, entirely pa financial 
criteria. - with little regard as 
to what may have taken many 
years to build — a sound policy 
towettis employees. 

This association is convinced 
that fa the future, global com- 
petition will be increasingly be- 
tween workforces, and the 
commitment of employees to 
such key factors as quality and 
service will be vital. 

Bryan C- Steyens. 

85, Tooley St, SSL . 

Broadcast^ 
tests ahead 

FTOm toe Managing Director , 
Yorkshire Television. 

Sir,-— Your leader "Broad- 
casting tests ahead" (Septem- 
ber 7) fails to address the key 
issue: Row: do we preserve thp 
high standards which we have 
traditionally enjoyed in British 
broadcasting? 

The Government pledged it- 
self to do just that in its Elec- 
tion manifesto. Your leader 
argues that drama, arts and 
current affairs programmes 
could not pay their way fa the 
market places. There is more 
to broadcasting than the market 
place; 'there is more to pro- 
grammes than seeing them 
solely as products paying them 
way,-. ■ 

We all know that change; is 
inevitable and most of us will 
welcome sensible changes. ' But 
what should n ot be tossed aside 
lightly is a broadcasting system 
which is regionally based, is 
healthy for the weUrhefag of 
fae nation and has proven 
vitality abroad, 

Paul Fox, 

The Telepisiptt Centre, 

Leeds. 


A strategy for 
electricity 

From Ur D^ Boss, 

Sir,-n-The argument (Septefa 
her i) by Mr John lypqs of the 
Engineers’ and Managers 1 Asso- 
ciation, -that the electricity 
generating authority and the 
grid should remain a single unit 
under privatisation would mean 
that independent producers 
would have little chance of com- 
. The principal 1 producer 
be the Bole distributor. 
Any rival could be headed off, 
33 fr fl.fi happened under the state 
-fapnopaly. hy -an unattractive 
price being offered for electrio- 
jty; The managers of the grid 
would argue that the private 
supplier often (though not ajr 
ways) has electricity available 
when demand is low and'- that 
therefore it can be compared 
with cheap, baseload supply. 


Then a margin is deducted. 

The rights and wrongs of this 
can he disputed on both sides; 
what is Inexcusable is to allow 
one of the parties to have mono- 
poly control over the delivery 
system and thus, right er wrong, 
decide the argument No organ- 
isation answerable to share- 
holders should be placed fa such 
a msi tinn if the new organisa- 
tion satisfied its owners, it would 
disappoint the consumers; and 
vice vers*. 

Mr Dysons’ union has made 
the point that the members 
work for the CEGB and do not 
wish to see their contracts of 
employment transferred. But 
this is done routinely whenever 
a company is taken over and 
there is no problem fa ensur- 
ing that wages, conditions and 
pensions are legally safeguarded 
inside the successor organ!?* 
tioq. That is one of the thing* 
-unions are fop. Parliament has 
wider responsibilities to all of 
us. 

David Ross, 

55 Ruskfo Park House, 

Champion Hdl SE5, 

Safety at 
•work 

From the Director, 

Industrial Relations, 

Chemical Industries 
Association 

Sir* — Onre again I must take 
issue with the c laims (Septem- 
ber 7) made by Mr Gee of the 
General, Municipal, Boiler- 
makers and Allied Trades 
Union. 

Mr Gee prediets that 1989 
accident figures fa our indusr 
try will be worse than those 
for 1983. What he omits to add 
is that this is largely because 
of new reporting and record? 
fag criteria (BIDDOR) which 
mean that a greater range of 
accident ef a serious nature 
will be reported. These regu- 
lations have been welcomed by 
this association as a means of 
drawing additional attention to 
the importance of safety fa this 
already safety -conscious fa» 
dustry. 

Employers in the chemical 
Industry meet regularly with 
national officers of toe trades 
iitiiww fa a forum Specially 
constituted to monitor and 
influence health, safety and 
environmental issues. Cur, 
renUv toe correlation of acci- 
dent statistics is just one of 
the items under consideration. 

Many other matters of major 
significance affecting workplace 
health and safety have been 
i$to»»i«pd and joint pos ition 
reached through constructive 
rigfr a f g in a spirit of co-opera- 
tion. Mr Gee’s overstatements 


are unhelpful at a time when 
toe industry is working so bud 
to continue the joint promotion 
r ar ’ecroperative activity ■ fa an 
area ot the highest possi b le 
mutual concern. 

The British ch e mical Indus- 
try is proud q£ its high level of 
safety awareness and continues 
to make efforts to improve 
standards of safety- Indeed, 
the emphasis on safety is re- 
flected at all levels of our 
pperatipns, as anyone who has 
visited a modern chemical plant 
will see. Managers In oqr 
industry are aware of their 
responsibilities and that they 
ran be prosecuted if negligence 
is proved. 

Kenneth Hack. 

Kings Buddings, 

Smith Square 5WL 

Who watches 

what 

From Mr W. PhiBipa. 

Sir, — John Lloyd’s column 
(Monday Page, September 7) 
embodies a hard-dying fallacy 
about the way television 
Viewers behave. 

Mr Lloyd contrasts allegedly 
faffing audiences for current 
affairs with those for entertafa- 
ment programmes such as The 
Price is Right. He deduces that 
current affairs is elitist and off- 
putttagly impenetrable, and 
says that "most FT readers 
either do not watch much TV, 
or watch toe programmes 
which the audience do 

not” This is simply untrue. 
The central fact about TV 
viewing, which can be inferred 
from a week’s or a decade's 
panel data, is that it is undif- 
ferentiated. Everybody watche? 
all kinds of programme; sooner 
or later we all see everything. 
The social distinctions between 
patrons of different daily papers 
and (to a lesser extent) radio 
jg not found in 

television. 

True, businessmen . (FT 
readers) tend to be lighter 
viewers in toto than, say, 
elderly working-class women. 
But whatever their class, in- 
come, age, sex or address, 
viewers distribute their viewing 
fa much the same proportions, 
allotting about one-third of 
their 'time to factual and 
informative items such as cur- 
rent affairs. If individual pro- 
grammes of that sort suffer 
fan mg audiences, it may be 
merely because a wider choice 
of them is on offer nowadays 
(half the whole peaktime out- 
put of BBC2 and Channel Four 
is factual). Moreover, news 
bulletins run longer and go 
deeper than formerly. Studying 
ratings continuously, I see no 
justification in toe figures for 
mctmtiating current affairs to 
the style of tabloid newspapers 
or game shows. Incidentally, 
the audience for The Price is 
night has fallen by a quarter 
since 1984. 

W. J. Phillips. 

20 Ormond Avenue, 

Hampton, Middlesex. 


Half year profit 
tops £68m 

Results for the half year to 30th June 1987 are another 
record for Cookson Group 


INTERIM RESUITS FOR 30th JUNE 1987 


Sales 

Halfyear 
1987 
£5 82.3m 

£458.3m 

* 

Increase 

27% 

Year 

1986 

£972m 

Operating profit before tax 

£73.5m 

£5 1.5m 

43% 

£213m 

Profit before lax. 

£68.8m 

£43.0m 

60% 

£95m 

Profit after tax and minorities 

£42.9m 

£26.7m 

61% 

£59m 

Earnings after tax per ordinary share 

26.0p 

ia8p* 

38% 

4L5p* 


Dividends per ordinary share 


4.00p 2.75p 


45% 


8.7 5p 



For further details 

see Oracle 
page 571 


Manufacturer of specialist materials for industry 
Cookson Group pic, 14 Gresham Street London EC2V 7AT 

Copies of the interim report can be obtained from the company secreiaiy at the above address 









SHEERFRAME 

British Winciows&DcxDrs 
B _ for the World 

B mm LJEUPlastics Limited 

Tel: (077 385) 2311 


FINANCIAL TIMES 


Friday September 11 1987 



Iran to co-operate with Saudi Arabia on oil prices 


THE LEX COLUMN 


BY RICHARD JOHNS IN VIENNA AND ANDREW GOWERS IN LONDON 


IRAN SIGNALLED its determi- 
nation yesterday to co-operate 
with Saudi Arabia in support of 
an oii price of $20 a barrel de- 
spite the acute political ten- 
sions between the two oil states. 

As two ministerial commit- 
tees of the Organisation of Pe- 
troleum Exporting Countries 
met jointly to review the cur- 
rently weakened state of the oil 
market, Mr Hossein Kazempour 
Ar dibili, Iran's deputy oil min- 
ister. said his country's backing 
could be relied on if Saudi Ara- 
bia helped "by getting their 
friends to adhere to production 
quotas*. This was a reference to 
continuing over-production by 
Kuwait and the United Arab 
Emirates, and to a lesser extent 


by Saudi Arabia, which took 
Qpec output about 3m barrels a 
day above its self-imposed ceil- 
ing of 16.6m b/d. 

Mr Ardibili's presence in Vi- 
enna, despite the fact that Iran 
is not represented on either of 
the two committees, was seen as 
a sign that Iran is desperately 
anxious that oil prices should 
not become a victim of the esca- 
lation of its conflict with Iraq or 
of bitter recriminations be- 
tween Tehran and Riyadh over 
the Mecca riot in July. As the 
meeting began, oil prices rose, 
with North Sea Brent crude 
marked up 39.S cents on the day 
to $18,435 a barrel. 

Fighting in the Gulf war in- 
tensified yesterday ahead of the 


peace mission to Iran and Iraq 
by Mr Javier Perez de Cuellar, 
the United Nations 
Secretary-General, which starts 
in Tehran tonight 
Iranian gunboats fired ma- 
chine-guns and rockets at the 
Cypriot oil tanker Haven. The 
incident, which caused little 
damage and no injuries, was the 


first reported shipping attack 
by Tehran in a week and was in 
apparent retaliation for an 
Iraqi strike on Iranian shipping 
at Iran’s Kharg island loading 
terminal on Tuesday. 

There were reports of heavy 
Iranian shelling of the port of 
Basra and other Iraqi cities, 
while Iraqi warplanes contin- 
ued to bombard industrial and 


civilian targets in Iran. Iraq 
said it would continue its at- 
tacks "until Iran understands 
that it has no other choice but to 
accept peace, according to UN 
resolution 598 ordering a cease- 
fire in the Gulf war." 

Mr Perez de Cuellar, who is 
going to Tehran and Baghdad 
with the full backing of the UN 
Security Council, expressed op- 
timism about his mission and 
hope that the two belligerents 
would observe a temporary 
truce while he was in their capi- 
tals as asked to by the Council. 

However, although Mr Perez 
de Cuellar said Iran had "ac- 
cepted the concept of a cease- 
fire*, there ■ was widespread 
gloom among diplomatic ob- 


servers yesterday about bis 
chances of success in persuad- 
ing Iran to implement the ceas- 
efire resolution. Iran has equiv- 
ocated so far, while Iraq has 
said it will accept the UN order 
only if Iran does. 


iVhv 


Meanwhile, there were fur- 
ther indications of Soviet pres- 
sure on Iran, and a senior Irani- 
an delegation was in China - 
another of the five permanent 
members of the Security Coun- 
cil - in an apparent effort to 
head off pressure for an inters 
national arms embargo against 
Tehran if Mr Perez de Cuellar's 
mission fails. China is accused 
by the US of being Iran’s main 
weapons supplier. 


for Rolls-Royce 


David White reports from La Mancha on the decline of the world’s garlic capital HoUCCkCF 


The not-so-sweet smell of success 


IF YOU believe in the power of 
crosses and garlic to ward off 
vampires, then your safest ref- 
uge would probably be to cling 
to the cross on the church tower 
of Las Pedroneras, a hot dusty 
town in the depths of La Man- 
cha, 100 miles south-east of 
Madrid. 

"Capital of garlic." the signs 
announce at both ends of town. 
The signs are superfluous. You 
smell it before you reach the 
place. 

Count Dracula would, in any 
case, be out of bis element in 
this town of 7.000 people, 
perched on a monotonous, 
Spanish plain. It is a long way 
from Transylvania. You would 
think it was also a long way 
from the Latin American debt 
crisis but you would be wrong. 

Because of Brazilian import 
restrictions, the garlic-growers 
of Las Pedroneras and the sur- 
rounding region have more of 
the pungent smelling bulbs 
than they know what to do with. 
Overnight, their main export 
market has collapsed. 

"There is nowhere else in the 
world where there are so many 
families in one place dedicated 
to garlic." says Mr Juan Pache- 
co, president of the local garlic 
co-operative. Some 6,000 house- 
holds in the area depend directr 
ly or indirectly on it 

The harvest, more than half of 
which is exported, could nor- 
mally be expected to bring in 
$75m. Instead of 9m or 10m ki- 
los, Brazil - by far the region's 
biggest customer - has bought 
only 2.7m kilos of this year’s 
crop. The price paid by Brazil 
has dropped by half, from $17 to 


‘People die 
of boredom 
here, but 
not of heart 
attacks’ 


MADRID* / 

V • •Vatenaa* 


>S PA I N/T 


apQm*»s 0 


the expansion phase. In recog- 
nition, the town renamed a sec- 
tion of its main street Avenida 
del BrasiL One Madrid business 
columnist, with a large measure 
of poetic licence, reckoned that 
Rio de Janeiro owed its carni- 
val to this part of Cuenca prov- 
ince. 

"Addiction to garlic.” he 
wrote, "is what gives joy and 
health to Brazilian mulattoes. 
Garlic is the aphrodisiac that 
permitted a race as staid and 
gloomy as the Portuguese to mix 
with the best African strains." 
But nobody knows if the Brazil- 
ians will come back. 


makes an 
emotional 
trip home 


By David Marsh In 
Wiebelskirchen 


CRIES OP "long live Erich’ and 
banners calling for the demoli- 
tion of the Berlin Wall greeted 
Mr Erich Honecker. the East 
German leader, yesterday on his 
emotional return trip to his 
home in the Saarland. 


between $8 and $&50 per 10-kilo 
box, and European clients have 
followed. 

The co-operative, which with 
its 2,200 members and 16m kilos 
of garlic accounts for over a 
third of local production, has 
cold storage capacity, but small 
independent farmers have to of- 
fload their produce as best they 
can. 

Last Saturday. International 
Gallic Day, they were handing 
out free bags of garlic to motor- 
ists on the main road that skirts 
the town. 

Tempered by a tough, dry cli- 
mate, with baking summers and 
bitter winters, the garlic grow- 
ers take pride in the tenacity 
and "loving care" that goes into 
their work. Sowing-time lasts 
from late November to early 
February. The harvest, starting 
in late June, is all done by hand. 

The region’s speciality fa pur- 
ple garlic (the colour of the dry 


peels but not of the cloves them- 
selves), of finer taste and lon- 
ger-lasting than the white 
French variety, but with a form 
lending Itself much less easily 
to mechanisation. Children 
here learn to collect the roots 
from the age of eight or 10 and 
in July they can be seen out in 
the fields at 4am. 

It used to be just a family- 
scale business, but expanded 
from the early 1660s. Vines and 
cereals have progressively 
made way for garlic as growers 
seek out fresh soil Half the 
land is now under irrigation, 
doubling the yield per hectare. 
There have been bad years, but 
in good years (1985-86 was one 
of the best) Las Pedroneras has 
thrived. The garlic boom even- 
halted emigration to the cities. 

The Brazilian connection, 
traced to Spanish emigrants in- 
volved in garlic-growing in that 
country, dates from the start of 


Is anyone to be found in Las 
Pedroneras who does not like 
garlic? "It’s very unlikely," says 
Mr Pacheco. He adds that, evi- 
dently thanks to garlic, the town 
has very few heart-problem 
cases. • 

Great store is set by garlic's 
health-giving reputation. Mr Pa- 
checo and his colleagues latch 
eagerly on to US medical re- 
search papers that tend to back 
up its claims to remedial or pro- 
phylactic powers. They hope 
that health fads will olftet the 
root’s one great handicap de- 
scribed by Alexandre Dumas in 
his Grand Dictionnaire de Cui- 
sine: "Everyone knows the 
odour of garlic except the one 
who has eaten it and wonders 
why everybody turns away.” 

"People die of boredom here,” 
says Mr Marcos Garcia Gonza- 
lez, a domestic appliance re- 
pairer who lived in Barcelona 
before marrying a girl from Las 
Pedroneras, "but not of heart at- 
tacks." 


Earlier, ou a journey to the 
border town of Trier, birthplace 
of the father of Communism, Mr 
Honecker declared: "A world 
without Karl Marx Is inconceiv- 
able.* 


Bnt on a rousing and rowdy 
visit to the Honecker home vil- 
lage of Wiebelskirchen, he wit- 
nessed the frantic and seamier 
side of West Germany's compet- 
itive capitalist society. 


Rolls-Royce's arrival on ' the 
stock market does at least re- 
quire it to produce interim fig- 
ures, for the first time, but noth- 
ing will persuade it to give too 
much away. A pre-tax profit of 
£60m compared with £53_2m ap- 
pears a reasonable advance giv- 
en the sharp rise in R & D 
spe nding . With the benefit of 
the £277m in cash raised for the 
company in May, profits For the 
year ought to reach £160m, 
against last year’s audited 
£I20m or pro forma £148 m. 

At that level, and with the 
shares down 3p to l95p in frilly- 
paid form yesterday, the pro- 
spective multiple of around 10 
hardly seems excessive. Aside 
from distant memories of 1971. 
and the more vivid ones of 
losses in the early 1980s, the 
main -depressant on the rating is 
the fear of foreign holders be- 
ing forced to sell. With nearly 14 
per cent of the shares now regis- 
tered in overseas hands, any 
foreigners who have still not 
paid the call need to move fast 
to sneak under the 15 per cent 
wire. Yet it is hard to believe 
that those who decided to sell 
rather than register have not al- 
ready done so given the turn- 
over in the stock and the price 
weakness of late. It is far too 
soon to hope that the 15 per cent 
limit itself will be removed, 
nonsense though it is. But if for- 
eigners are really keen, a mar- 
ket might even emerge in stock 
registered as held overseas. 


Rolls-Royce | Coofcson 


Share price relative to 
FT- A All-Share index 


Cooks on was yesterday show- 
ing the analysts its -lugubrious 
new corporate video, all about 
how no-one has ever heard of 
the company. Its share price, 
meanwhile, gives it the same 
market value as Plessey or Brit- 


ish Airways. Its profit record 
might put it on a higher rating 
a g ?in, were it not for the feet 
that Us Tioxide stake keeps 
. growing 'in importance, contri- 
buting 50 per cent of profits at 
tiie half-way stage. But after all, 
the titanium dioxide price 
keeps rising by ten per cent a 
year and demand by five per 
cent, and Tioxide plans a 25 per 
cent capacity increase by 1990. 
Cyclical commodities are won- 
derful things when the cycle is 
headingup. 


May 1987 


- down lip to 550p yesterday, in 
a remarkably grudging market - 
on a prospective multiple of 33. 
This is a discount to the sector, 
let alone the market; but ana- 
lysts are already starting to wop- 
ry about next year’s rising tax 
charge, which could pull earn- 
ings growth back to below 10 
percent 


Rowntree 


Against the background of 
struggling news cameramen who 
had reportedly paid thousands of 
marks for window seat views. Mr 1 
Honecker was whisked away in 1 
his heavily guarded Mercedes to I 
the two-storey house in the Saar 1 
village he last saw nearly 40 
years ago. 


Wiebelskircheners crowded 
six deep in the narrow streets, 
hemmed in by police, and gave 
Mr Honecker a reception of 
cheers mingled with occasional 
protests. In a rare display of emo- 
tion, Mr Honecker broke through 
his guards and greeted wellwish- 


Aquino faces problem of the military 


Continued from Page 1 


having difficulty in deciding 
whether Mr Arroyo - an old 
friend who stood by her follow- 
ing her husband’s assassination 
- should go. 

The Philippines military is of- 
ten likened to an escaped genie 
that Mrs Aquino has not been 
able to return to its bottle after 
it helped put her in power in a 
civilian backed coup 18 months 
ago. In reality, it has not been in 
its bottle for some time. 

Mr Ferdinand Marcos, the fbr- 
mer president, reorganised the 
military to ensure, not so much 
the security of the state, but 
more his personal survival. He 
spawned many corrupt generals 
who supported him through a 


chain of command that by- 
passed most of the defence es- 
tablishment The concept of ci- 
vilian supremacy over the 
military has not been applied 
since democracy was effectively* 
suspended in 1972. 

Even the coup that toppled Mr 
Marcos was not meant to deliver 
to Mrs Aquino the presidency 
that was stolen from her. in 
fraudulent elections. 

The original plot against Mr 
Marcos had been a straight grab 
for power, fuelled partly by dis- 
illusionment with corruption 
and lack of professionalism. Mr 
Emile's "RAM boys" led by Col 
Honasan have not lost the taste 
for power. 


Despite her recently increas- 
ingly shrill calls for "victories" 
against the NPA, Mrs Aquino is 
still seen by the army as "soft” 
on the Communists. The most 
serious complaint against Mrs 
Aquino is that she is not send- 
ing the '.-right signals to her 
troops: 

Mr Rafael Ileto, the new De- 
fence Secretary, dismisses 
many of -these complaints and 
bluntly accuses officers of oper- 
ational incompetence. Many 
units, with some notable excep- 
tions, have not learnt the basics 
of how to shoot straight, move, 
communicate and maintain 
equipment 

A divisive network of military 


fraternities, often stemming 
from the West Point-style Phil- 
ippine Militaiy Academy, has 
not only prevented promotion | 
by merit but also breeds greater i 
loyalty to the "class" and unit 1 
than to the state I 


Wiebelskirchen, to which the I 
fervently communist Honecker 
family moved in 1913 when Erich 
was one year old, has beeome 
both a heavily televised shrine 
for Honecker watchers, and a 
symbol of the political gulf 
which persists between the two 
Germanics in spite of his histor- 
ic trip here this week. 


Some military observers say 
that the country’s saving grace 
is that the Communist rebels 
are equally incompetent This 
may save the Aquino Govern- 
ment for the time being from 
the threat from her left. 

But, meanwhile, Col Honasan 
and an unknown number of reb- 
els are at large. Both groups are 
no doubt relishing Mrs Aquino’s 
discomfort and the sad lack of 
decisive action from her palace. 


Mr Hans Thai, a member of the 
Wiebelskirchen Catholic com- 
munity who laid on a tent, re- 
freshments and choral singing 
in front of (he church yesterday, 
summed the feelings of many: 
"Mr Honecker is homesick and 
has been allowed to come home. 
Now the small people in East 
Berlin who want to come to the 
West should also be allowed onL" 


- For veteran followers of 
Rowntree, one of the regular 
events of the past decade has 
been the false dawn breaking 
over Europe. Yesterday’s fig- 
ures, showing Europe in profit 
at the interims for the first time, 
are at least a reminder of what 
might happen were the group to 
achieve lift-off The remarkable 
sales increases in Germany and 
France, coming mainly in estab- 
lished brands like After Eight 
and Lion Bar. promise a virtu- 
ous circle of higher volume 
leading to lower costs, better 
product quality and bister ad- 
vertising budgets, ■! ■: . 

Well, perhaps. The UK con- 
fectionery business has mean- 
while enjoyed a cyclical up- 
swing due to lower cocoa prices 
and consequently increased 
volume, while the US has gone 
backwards as Tom’s Foods is re- 
shaped to face the competition. 
The net effect for the full year 
should be pre-tax of £115m, a 
highly respectable increase of 
almost 40 per cent after several 
lean years. This puts the shares 


Bormah Oil - 

Burnish Oil could do a lot 
worse than change its name to 
Castrol to underline the extent 
of its transfbrmation. over the 
last few years. It has shed all of 
its excess corporate baggage 
and is reaping finally the bene- 
fits of Castrol's position as one 
of the world’s leading specialist 
lubricant companies. More than 
three quarters of the 42 per cent 
rise in interim- pre-interest 
trading profits is accounted for 
by this side of the business and 
continued increases in market 
share, particularly in the giant 
US market, underline the 
group’s confidence, that it can 
sustain 10 per cent a. year vol- 
ume growth despite a static 
worldwide market - 


The operating companies, 
meanwhile, produced a very re- 
spectable 23 per cent profits 
rise in the first halt with last 
year's only sticky area - sup- 
plies to the US electronics in- 
dustry - apparently on the 
mend. Though the group’s huge 
diversity makes forecasting un- 
certain, full year profits of. 
£145m overall would put the. 
shares - down 8p at 804p - on 15 
times earnings. Since this final- 
ly represents a market pie, the 
re-rating may not go much far- 
ther; but a company on an aver- 
age multiple can carry on out- 
performing, provided earnings 


MEPG/Oldham 


"Burmah is beating its self-im- 
posed target of a 20 per cent re- 
turn on average' capital ' em- 
ployed and believes that it can 
maintain an average growth in 
real earnings, per share of 10 


per cent a year over the long 
haul. With capital spending 
running at £125m in the current 
year, its gearing, which is cur- 
rently under 10 per cent, will 
probably double but the.group 
still feels that it has the finan- . 
cial headroom for a major ac- 
quisition. Concern that this 
could cause the group tosquan- 
der its new-found financial 
strength is the only charitable 
explanation for yesterday’s sur- 
prisingly large drop in the 
share price. 


Devotees of the arcane world 
of property valuation will no 
doubt find amusement in the 
Oldham Estates story. The same 
portfolio -has been valued on a 
similar basis three times - twice 
as at end September 1986 and 
once at end July 1987 - with 
widely different results. The 
first two at 117p and 147.2p a 
share were disparate enough. 
The third at 194. 5p suggests a 
rate of increase in central Lon- 
don property this year that 
would surprise even Primrose 
Hill residents. 


' The serious problem, though, 
is that nearly 70 per cent of the 
company has just changed 
hands at a price based on the 
lowest valuation - admittedly 
one accepted by the vendors. 
The purchasers, MEFC, now 
look to have a done a clever 
deal There is no daily official 
list for property prices, but per 
haps it is time for surveyors to 
put a little more science into 
the art 


§ v u '*' 


i ' ^ **-e 


Japanese trade surplus 
hit by rising imports 


London SE sets £1 fines 
on settlement backlog 


Continued from Page 1 


BY HUGO DIXON IN LOMJON 


creased competitiveness of im- 
ported manufactured goods. 

Japanese officials have been 
particularly encouraged by the 
increase in imports of manufac- 
tured goods this year. 

A recent analysis by the Ja- 
pan External Trade Organisa- 
tion CJetro) showed that in the 
first half of this year the value 
of imports of manufactured 
goods (excluding non-monetary 
gold) rose 329 per cent to 
$27.7bo. 

The growth of manufactured 
imports from Asian industri- 
alising countries was particu- 
larly strong. These imports rose 
66 per cent in the first half, 
reflecting the increasing pur- 
chases of electronic compo- 
nents and goods from these 
countries by Japanese manufac- 
turers. 


On the same basis, imports 
from the EC countries were up 
35.6 per cent in the first half 
while imports from the US rose 
16.1 per cent 

Mr Kyohei Yamasaki, director 
of Jetro’s quantitative analysis 
team, said yesterday that he was 
confident that the declining 
trend of Japan’s trade surplus, 
would continue in the next few 
months. He declined to make a 
forecast for the trade surplus 
for the current fiscal year to 
end-March 1988. 

Mr David Gerstenhaberofthe 
US investment bank, Morgan 
Stanley, believed the deficit 
would fall from $101bn last year 
to$65bn. 

The announcement of a nar- 
rowing. Japanese deficit con- 
tributed to a strong bounce in 
the dollar’s value after its heavy 
losses of the past few weeks. 


MEMBERS of the London stock 
exchange are to be fined £1 
(SL65) a .day for each bargain 
dating from last October’s Big 
Bang deregulation of financial 
markets that they fail to settle 
in the next six weeks. 

The fine is much lower than 
some people within the Stock 
Exchange bad been urging. 
They had argued that a fine of 
£20 or £30 was needed to en- 
courage members to settle their 
bargains more promptly. 

However, Mr Michael Baker, 
executive director for settle- 
ments. said yesterday that £1 
was sufficient "We wanted to 
strike a balance between im- 
posing a penalty and crucifying 
the firm.” 

The threat contained in a let- 
ter sent to members on Wednes- 
day, is the latest element in the 
exchange's strategy for dealing 


with the settlements crisis. 

In an earlier move, the ex- 
change said all unsettled bar- 
gains, valued at over £100,000 
and more than four weeks old. 
would have to be settled by Au- 
gust 28. More than two-thirds of 
this backlog has now been 
cleared. 

The exchange's settlement 
task force is now sifting through 
the reasons given by firms 
which failed to meet the dead- 
line. Mr Baker said he was like- 1 
ly to take action, ] 

He was concerned, however, 
that by concentrating on high- 
value bargains, firms might ne- 
glect the smaller value backlog. ! 
The exchange's letter warns 
that if old bargains - transacted ! 
between October 27 last year 
and January 30 this year - re- , 
rr»nin unsettled after October 23, I 
the £1 fine will be imposed, , 


Mr Klaus Hoppsteedter, chair- 
man of the Wiebelskirchen coun- 
cil, said some local people had 
been pestered by cameramen of- 
fering money for vantage points 
next to Mr Honecker’s old home. 
His 70 year-old sister Gertrud 
still lives there and welcomed 
him there for coffee yesterday af- 
ternoon after the two made a sen- 
timental pilgrimage to their par- 
ents' grave in the leafy hillside 
cemetery. 

Stories that some media teams 
paid up to DM28,000 (811,100) for 
vantage points from which to 
film, tbongh meeting some scep- 
ticism, caused indignation 
among local Communists. 

Underlining the mixed emo- 
tions, riot police stood by in the 
normally sleepy village centre as 
young conservatives trundled by 
In a placard-plastered van, call- 
ing for an end to "dictatorship* in 
East Berlin. 

At a fete organised by the Wie- 
beiskirchen communists, Mr 
Werner Zins, leader of the pipe 
band of which Mr Honecker is an 
honorary member, said: "People 
•are prond that the local hero has 
returned." 




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Argentine interest freeze 


Continued from Page 1 


« E SPtoy 


S 27 81 SW 
S * 75 Stnumn 
C 17 S3 S teShaM 
N 15 9 Strasbourg 
8 21 78 May 

C 24 75 Taljai 
T 28 84 -mate 


F 27 81 
F 27 M 
R U 55 
C 21 78 
S 17 83 


over 19 years $30bq in principal 
payments, to receive $L95bn in 
new long-term loans and to re- 
new some $2bn in short-term 
trade credits. 


S 33 91 Ttasrtfc 
S 21 78 Tokyo 

5 28 75 Toronto . 

- - - TMb 

6 24 73 W an d a 

R 12 54 Veka 
CUt* Vbna 
C 27 H Btaa 
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C 27 81 
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Interest rates in the package 
have been switched to the Lon- 
don Inter-Bank Offered Rate 
from the higher US prime rate: 
Earlier in the year, agreement 
with the IMF and the World 
Bank secured a farther $3.&5bn 
in loan disbursals for 1987 and 
1988. 

The agreements, however, 
were calculated on the basis of 


Argentina achieving a visible 
trade surplus in excess or $2bn 
in 1987. That goal is now well 
off-target as a result of crop 
acreage reductions and falls in 
commodity prices reducing the 
overall level of exports. 

Argentina is already unable 
to meet macroeconomic targets 
agreed with the IMF in July, 
and even before the elections 
government officials, including 
Dr Lose Luis Machlnea, the cen- 
tral bank president, warned 
that "a new approach" would be 
needed in the foreign debt ne- 
gotiations. 


On a grimmer note, Mr Fritz 
Sick, an old communist comrade 
in arms who first met Hr Ho- 
necker in 1928, said the much- 
criticised shooting of East Ger- 
mans trying to escape to the West 
was "unpleasant but necessary." 

Earlier hi the day, scuffling 
broke out in Trier as red flag 
mving youths tore down anti- 
East German flags- But most of 
the population seemed to regard 
the visit of the Honecker motor- 
cade as little mere than an incon- 
venience to shopping. 

Mr Honecker’s sweetest mo- 
ment yesterday must have come 
in the evening when he was driv- 
en through the street in the Saar 
steel town of Nennkirchen 
where be was born. Nearby stood 
the fitatne of Baron Stamm, the 
-Iron Icing * of the Saar, who em- 
ployed members of the Honecker 
family and became the young Er- 
ich’s sworn enemy. In the shad- 
ow Of the rained hulk of the now 
closed Neunktrchea steelworks, 
the moustachioed baron looked 
strangely dejected as Mr Ho- 
necker drove past to victory. 


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Anatole Kaletsky looks at First City Bancorp’s blind faith in Lone Star State 

Why Texas bank fell to Yankees 


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“TOO much ain't enough" is the un- 
official motto of the Republic of Te- 
xas - a state which used to think of 
itself as a land of limitless poten- 
tial, a place where the only obstruc- 
tion -to ambition and enterprise was 
the occasional interference of med- 
dling Feds and Yankees from Wash-' 
ington and New York. 

Nothing could better . illustrate' 
the sometimes explosive interplay 
of Texan insularity and ambition 
than the fortunes of First City Ban- 
corp - the biggest, oldest, and most 
prestigious locally-owned bank io 
Houston - which was unceremoni- 
ously handed over by federal regu- 
lators to a group of Yankee finand- 
ers this week. 

As a result of Wednesday’s rescue 
by the Federal Deposit Insurance 
Corporation, First City will be re- 
capitalised into a thoroughly sol- 
vent independent bank. 

Its present shareholders, how- 
ever, will lose at least 97 per cent of 
their investment in a bank whose 
market capitalisation was as high 
as £66 Dm only three years ago and 
nearly $1.5bn at its' peak in 1981. 
Preferred shareholders will get on- 
ly $30m in cash for stock whose liq- 
uidation value was supposed ito be 
$174m and bondholders will have to 
accept substantial losses. 

As Mr William Seidman, chair- 
man of the FDIC. said on Wednes- 
day, in an attempt to dispel the pop- 
ularly-held view that the Federal 
Government was financing another 


“bail- out" for a bank which was “too 
big to fait" "First CHy depositors 
have been protected, and the bank 
will keep going. But for all practical 
purposes in terms of stockholders 
and management, the bank has 
failed." 

Yet 18 months ago, when the 
bank’s stock still traded at around 
10 tfmes its present level of SI. 5. the 
writing oh the wall for First City 
was already emblazoned in letters 
of Texas-scale brashness and size. 
The bank fell into what turned out 
to be an irredeemable financial cri- 
sis with the collapse of oil prices to- 
wards the end of 1985. 

But First City did not try to follow 
the example of Continental Illinois 
and juggle quietly with its balance 
sheet or go discreetly to the Euro- 
markets for wholesale funds. In- 
stead it ottered gifts of Cessna pri- 
vate aeroplanes and Porsche cars to 
any of its retail clients who were 
prepared to keep a Sim in their ac- 
counts. This being Texas, such gim- 
micks brought in 8150m in new re- 
tail deposits within a few weeks. 

First City had always been the 
premier banker to the Texas oil 
patch, sometimes nicknamed the 
“oil industry’s ministry of finance" 
and it stiD had plenty of loyal millio- 
naire clients. 

In the end, however, First City 
lost far more than it gained from 
the cultural and historic loyalties 
that bound it so closely to its home 
state. Practically all of the major 


RUST CITY BANCORP’S 
FIVE-YEAR RECORD 

Assets Net income/ Loan loss 



Sbn 

(loss) $m 

provision 

1082 

ISA 

120 

S3 

1083 

173 

SO 

212 

1084 

173 

81 

159 

1085 

i&a 

42 

209 

1086 

13.7 

(402) 

497 


Texan banks have been in widely- 
publicised danger since oil prices 
started falling from 1982 onwards; 
but ultimately all of them except 
first City managed to save them- 
selves, or at leak their sharehol- 
ders, from ruin — confoun d in g many 
a Yankee Jeremiah. 

After this week's rescue, there is 
only one very large Texas bank left 
on the sick-list: the state’s second- 
biggest bank, MCorp of Dallas, with 
assets of £22 bn. 

Several medium-sized banks, in- 
cluding National Bancshares of San 
Antonio, with $3.3bn of assets, and 
Texas American of Fort Worth with 
S6bn, are also candidates for merg- 
ers. But none of them, and certainly 
not MCorp, are now “in danger of a 
First City type collapse,” according 
to Ms Sandra Elannigan, an expert 
on Texas banks at Paine Webber. 

Indeed, with the rescue of First 
City, it seems that the worst stage 
of tiie Texas hawk crisis may have 
been resolved. 


Why then did First City fail when 
others managed to pull themselves 
back from the brink? The answer 
lies largely in the management's ex- 
cessive commitment to Texas, 
which sometimes seemed to border 
on blind faith. 

It is easy with hindsight to blame 
the management for its excessive 
lending to the oil industry in the 
late 1970s. But First City was wide- 
ly praised at the time for its energy 
expertise and became a darling of 
Wall Street because of the huge 
profits in the risky business of lend- 
ing to the oil services and drilling 
contractors, who paid margins of 
two to three percentage points 
above those on run-of-the-mill cor- 
porate lending. 

It is also unfair to suggest the 
management simply ignored the 
possibility of lower oil prices. In- 
deed, at a celebrated meeting it 
held in 1981, the bank forced some 
of its clients, much to their indigna- 
tion, to listen to a presentation by 
economists predicting that oil could 
fall to 815 a barrel by the middle of 
the decade. 

In fact, it was not until 1982, after 
the oil price had started falling, that 
first City made its greatest and 
most extraordinary error. 

Aware that its energy portfolio 
was in danger, the bank, like others 
in Texas, decided to diversify. But 
unlike its great Houston rival, Tex- 
as Commerce Bank, which ex- 



Montedison Britannia Arrow buys 
first-half NatWest unit trust 
earnings business for £ 41 . 5 m 

fall Ifi Q0/ a 

* / V BY HUGO MYON IN LONDON 


Robert Abboud 


paneled mainly outside Texas, First 
City concentrated on a market clos- 
er to home - Houston property 
lending. 

How the management could have 
ignored the obvious relationship be- 
tween oil and Houston property val- 
ues is a story that may emerge only 
when the hank’s business is unrav- 
eled by the new management, led 
by Mr Robert Abboud, formerly 
chairman of First Chicago and later 
president of Occidental Petroleum. 

In the meantime, First City 
shareholders can only look with en- 
vy at the Houston's two other major 
banks - Texas Commerce and Alli- 
ed Bancs hares, which managed to 
sell out voluntarily to the Yankees, 
instead of being forced into their 
hands when there was nothing left 
to sell. 


BP regroups in US I SEC charges Allegheny Int’l 


BY OUR FINANCIAL STAFF 

BRITISH PETROLEUM yesterday, 
announced a re-organisation of its 
North- American exploration and. 
production activities following the 
completed acquisition of the whole 
of Standard Oil of the US. 

The re-organisation of the Stan-' 
dard Oil Production Company will 
result in the loss of some 300 to 500 
jobs from closure of several district 
offices and the concentration of 
staff in Houston, Texas, and at BP 
■ America's headquarters in Ohio. 


The re-organisation follows a pe-' 
riod of major upheaval for BPs US 
operations since Mr Robert Horton, 
the chairman, and Mr John 
Browne, now head of the upstream 
operations, were sent out from Lon- 
don last year to cut the loss-making 
operations from Standard Oil. 

Mr Browne said: “By centralising 
geographically and organising into 
strategic business units, we can 
best take advantage of US opportu- 
nities." 


BY OUR FINANCIAL STAFF 

THE US Securities ft Exchange 
Commission charged Allegheny In- 
ternational, the embattled US con- 
sumer products group, and Mr Ro- 
bert Buckley, its former chairman, 
with corporate reporting and re- 
cord-keeping violations in connec- 
tion with fringe benefits and perks 
given to top executives. 

Mr Buckley was forced to resign 
in August 1988 after several share- 
holder suits alleged a history of cor- 
porate extravagance and waste dar- 


ing his tenure as chief executive 

and chairman. 

Since then, the company has 
been reorg anising and selling as- 
sets, including its Wilkinson Sword 
razor business, but has been a con- 
sistent subject of takeover specula- 
tion following the failure of a $500m 
buyout plan in May. 

In July Mr Irwin Jacobs, the Min- 
neapolis investor, disclosed a stake 


of just under 10 per cent in the 
Pittsburgh-based concern. 

The charges are the result of a 
months-long investigation by the 
SEC. In a lawsuit filed on Wednes- 
day in a federal court in Washing- 
ton, the agency alleged that the 
company failed property to record 
and fully disclose the extent to 
which top executives made person- 
al use of company-owned resi- 
dences and aircraft, among other 
things. ... 


By Alan Friedman fn Milan 

MONTEDISON, the Italian chemi- 
cals, pharmaceuticals, energy and 
financial services group, last night 
unveiled a 15.9 per cent fall in its 
gross operating profit for the first 
six months of 1987 to L739bn 
(8565m). 

The group’s consolidated net prof- 
it, however, was up to L243bn for 
the first half of 19B7, against 
L227bn in the equivalent period last 
year. 

The figures were struck on sales 
that declined by 2.5 per cent to 
L6,328bn. 

Group total debt as at June 30 of 
this year was L6,098bn, up from 
L5,050bn at the end of June 1986. 
Debt servicing charges, however, 
declined from L304bn in the first 
half of 2988 to L280bn as at June of 
this year. 

The group last night also decided 
upon the terms of a public offer to 
be made by its Erbamont pharma- 
ceuticals division for the 25 per cent 
of shares outstanding in Erba- 
monfs Farmitalia Carlo Erba sub- 
sidiary. 

Erbamont, quoted on the New 
York Stock Exchange, currently 
owns 75 per cent of Farmitalia and 
will make a public tender offer to 
buy out the remaining shares. The 
tender, open from September 15 to 
October 2, will see a package of 
shares in Erbamont plus cash of- 
fered to Farmitalia shareholders. 
The equivalent value of the offer 
will be L13.500 per ordinary and 
L9.000 per savings share in Farmi- 
talia, representing respective prem- 
iums of 31 and 34 per cent above the 
average Farmitalia share price. 

Farmitalia itself saw its consoli- 
dated revenues decline by 3i per 
cent in the first six months of 1987 
to L457bn. The consolidated operat- 
ing profit at Farmitalia declined by 
2.6 per cent, but with interest in- 
come and extraordinary credits 
from asset disposals factored in, the 
consolidated profit rose by around 
2$ per cent to L82-6bn. 


BY HUGO DIXON IN LONDON 

BRITANNIA Arrow Holdings, the 
UK financial services group, is to 
buy County Unit Trust Managers, 
National Westminster Bank’s unit 
trust business, for Ml. 5m (568.5m) 
in cash. 

The deal was clinched yesterday 
after NatWest, one of Britain's main 
clearing banks, had evaluated bids 
from about 10 other financial insti- 
tutions, including insurance compa- 
nies. foreign banks and unit trust 
groups. Some had offered £20m or 
less. 

The acquisition sets new levels 
for prices in the unit trust sector, 
reflecting the fact that unit trusts 
are one of Britain's fastest-growing 
financial markets. 

Britannia is paying the equiva- 
lent of 10 per cent of County's 
C400m in funds under management 
Perpetual, the most expensive quot- 
ed unit trust company, is capita- 
lised at 8% per cent of its funds un- 
der management 

County has net tangible assets of 
£800,000 and made pre-tax profits of 
£895,000 in the 15 months to the end 
of last year. Britannia has therefore 
paid about 100 times the most re- 
cent year's earnings. 


Mr Keith Crowley, marketing di- 
rector of MIM Britannia Unit Trust 
Managers, denied £ 41 .5 m was an 
excessive price. He said having 
MOOrn in unit trusts for sale was a 
unique situation, and so NatWest 
could demand a high price. 

NatWest chose to dispose of its 
unit trust arm, after its decision to 
offer independent advice through 
its bank branches. Under the new 
Financial Services Act, this meant 
its branches would not also have 
been able to sell the group's unit 
trusts. 

As a result of the acquisition, 
MIM Britannia will have £1.6bn in 
funds under management, making 
it the sixth-largest unit trust compa- 
ny in Britain, Mr Crowley said. 

There would be substantial econ- 
omies of scale, he added, as over- 
heads on research and marketing 
would not have to be duplicated. 
County’s 14 unit trusts will be 
merged into Britannia's. 

Mr Charles Viiliers. chief execu- 
tive of NatWest Investment Bank, 
intermediate holding company 
which owned County, said few if 
any of the 80 people who worked for 
County would be made redundant 


Canadian Pacific to 
focus on core units 

BY ROBERT GIB BENS IN MONTREAL 


CANADIAN PACIFIC, the trans- 
portation, resources and industrial 
conglomerate, will concentrate on 
developing its four core sectors and 
has no acquisitions in sight that 
would absorb part of its C$500m 
(USS378m) in cash, says Mr William 
Stinson, president 
CP is leaning heavily on its two 
hnnming forest products subsidia- 
ries to underpin second-half earn- 
ings and balance uncertainties in 
the rail operation and in oil and gas, 
he told analysts. 


Overall CP should do at least as 
well in the second half as in the 
first when it earned C$277 .Shn, or 93 
cents a share, before special gains 
On asset disposals of C$193m. 

Mr Stinson said that, though CP 
wanted a fifth core sector, prices 
were very high and “we don’t see 
anything out there right now." 

The other sectors are resources, 
freight railway, property, steel and 
manufacturing. The company has 
reduced its consolidated debt by 
C$2. 5b n. 




T f 



THE KINGDOM OF DENMARK 

Yen 10,000,000,000 
Yield Curve Notes Due 1991 

In accordance With, the provisions of the Notes# notice i# hereby 
given that for the period from itth September, 1987 to 10th 
March, 1888, the Rate of Interest WUl be 4.02111% whh a Coupon 
Amount of Yen 40411 per 'rtm 1,000,000 Note. The next interest 
payrnem date being 10th March, 1988. ' 

OemcALBAtac 

. Agent Bank - 


S American Savings and 
Loan Association 

U.S. $200,000,000 

Coflaterafized Floating Rate Notes Due 1996 

Notice is hereby given that the Rate of (merest has been fixed at 
8-3375% pJL ana that the interest payable on the relevant Interest 
Payment Dare. March II, 1988 against Coupon No. 3 in respect of 
U&$KX),000 nominal of the Notes wffl be US$4, 21507 and in 
respect of U .54250,000 nominal of the Notes wS be 
U£$ 10,53767. 


September IK 1987, London A JLJ/'A 

By. Citibank. NA(CSS Dept). Agent Bank CfTlBAN\& 


AMERICAN PRESIDENT LINES, LTD. 

Oakland, California, U.S.A. 

a wholly owned subsidiary of 

AMERICAN PRESIDENT COMPANIES, LTD. 

UJ5.$ 202,500,000 

Vessel Mortgage Facility 

Guaranteed by 

American President Companies, Ltd. 

Arranged and 
provided by 

Kreditanstalt fur Wiederaufbau 

Additionally 

DG BANK 

Deutsche Genossenschaftsbank 

BARCLAYS BANK PLC 

COMMERZBANK 

Aktiengesellschaft 

NORDFINANZ-BANK ZURICH 

guaranteed by 

Agent 

MXI 8# Kreditanstalt 

111 Vf fur Wiederaufbau 






24 


Financial Times Friday September 11 1987 


Western Mining Corporation 

Limited 

US$50,000,000 9 % Bonds 1992 


S.G. Warburg & Co. Ltd announce that Bonds for the nominal amount of UStl.563.0Q0 have 
been drawn for the redemption instalment due 15th October, 1987. . 

The distinctive numbers of the Bonds drawn in the presence of a Notary Public are as 
follows.— 



44 

67 

90 

112 

135 

158 

381 

204 

226 


272 

295 

317 

340 

363 

386 

408 

431 

454 

477 

499 

522 

545 

568 

590 

613 

636 

658 

661 


726 

7 49 

772 

794 

817 

840 

863 

885 

90S 


954 

*176 

999 

1022 

1045 

1067 

1090 

1117 

3140 

3163 

1185 

1208 

1247 

1271 

1293 

■1316 

1339 

3364 

3386 


1435 

1462 

1484 

150 7 

1530 

1553 

1576 

1598 

] 621 


1667 

1689 

1712 

1^35 

1758 

1780 

1803 

3826 

1849 


1894 

1917 


1963 

1985 

2008 

2031 

2054 

2076 



2145 

2167 

2190 

2213 

2236 

2258 

2282 

2305 


2353 

2376 


2429 

2452 

2474 

2497 

2520 

2543 

2465 

2588 

2611 

2634 

2656 

2679 

2702 

2725 

2747 

2/70 


2816 

2839 

2861 

2884 

2907 

2930 

2952 

2975 

2998 

3021 

3043 

3066 

3089 

3112 

3134 

3157 

3180 

32® 

3226 

3248 

3271 

3294 

3317 

3339 

3362 

3385 

3408 

3429 

3452 

4475 

3*98 

$520 

3543 

3566 

358? 

3611 

3634 

3657 

3680 

3703 

3725 

3748 

3"71 

3794 

3816 

3539 

3872 

3895 

3917 

3940 

3963 

3986 

4008 

4031 

4059 

4089 

4113 

4136 

4159 

4182 

4205 

4227 

4250 

42-3 

4296 

4318 

4341 

4370 

4393 

4415 

4438 

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4484 

4506 

4529 

4572 

4637 

4660 

4696 

4736 

4739 

4783 

4805 

4828 

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4933 

. 4956 

49 =7 9 

5010 

5033 

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5079 

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5139 

5162 

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5314 

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5459 

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5617 

5639 

5662 

5685 

5708 

5"30 

5-53 

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5^99 

5822 

5844 

5867 

5890 

5913 

5936 

S949 

5982 

6005 

602- 

6050 

6073 

6096 

6116 

6141 

61S4 

62CT 

6273 

6303 

6326 

6349 

6572 

6433 

645 6 

6479 

6502 

6424 

6547 

6570 

6593 

6615 

6638 

6661 

6683 

6705 

6-28 

6751 

67-5 

6798 

6820 

6843 

6908 

6931 

6953 

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6999 

7022 

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7090 

7113 


7J58 

7181 

7204 

7227 

7249 

7272 

7295 

7318 

7340 


7416 

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7499 

7522 

7558 

7602 

7625 

7648 


7693 

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7-85 

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7830 

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7898 

7921 

7944 

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7998 

8021 

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8135 

8170 

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8261 

8284 

8306 

8329 

8352 

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8926 

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9040 

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9108 

9142 

9202 

9238 

9263 

9286 

9309 

9331 

9365 

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44326 

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44713 

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45327 

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45532 

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46169 

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46237 

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46374 

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46624 

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46693 

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47353 

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47603 

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4-784 


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48513 

48535 

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48918 

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49009 

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49146 

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49510 

49533 

49555 

49646 

49578 

49876 

49601 

49899 

49624 

49710 

49732 

49755 

49778. 

49801 

49823 


On 15th October, 1987 there will become due and payable upon each Bond drawn for 
redemption, the principal amount thereof together with accrued interest to said y at the 
office oO— 

S.G. Warburg & Co. Ltd. 

Paying Agency, 6th Floor, 

1 Finsbury Avenue, 

London EC2M 2PA 

or one of the other Paying Agents named on the Bonds. 

Interest will cease to accrue on the Bonds called for redemption on and after 1 5th October 
1987 and Bonds so presented for payment must have attached all Coupons maturing after 
that date. 

The following Bonds previously drawn for redemption on the date stated below have not vet 
been presented for payment- 7 


15th October, 1986 


84 

188T7 

35270 

35568 

35666 

36164 

36462 

36760 


1097 

35001 

35300 

35598 

35896 

36194 

36492 

36790 


1227 

35031 

35329 

3562? 

35926 

36224 

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36820 


5340 

35061 

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35955 

36254 

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36850 


7346 

35091 

35389 

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35985 

36283 

36581 

36880 


7605 

35121 

35419 

35717 

36015 

36313 

36611 

36909 


7843 

35150- 

35449 

35^47 

36045 

36343 

36641 

36939 


9199 

35180 

35478 

35777 

36075 

36373 

36671 

36969 


10040 13253 
35210 35240 
35508 35538 
35806 35836 
36104 36134 
36403 36432 
36701 36730 

3W7 


lltb September, 1987 


INTERNATIONAL COMPANIES and FINANCE 


Coles Myer lifts earnings by 20% 

IU CVfflUEV 


BY CHRIS SHERWELL IN SYDNEY 


AUSTRALIA’S Coles Myer 
group, the world’s second 
largest corporate retailer out- 
side the US, yesterday reported 
a 20 per cent rise in net earn- 
ings despite higher taxation 
and a generally depressed 
domestic retail sector. 

Figures for tie year to June 
showed a rise in after-tax pro- 
fits from ATI 82m to A$218Bm 
(US$159.5m) on turnover which 
increased from A$10.4bn to 
ASH-Sbu. 

Earnings per share rose from 
40.54 cents to 48.44 cents, and 
the annual dividend, fully 
fxanked, was increased from 21 
cents to 24 cents. 


Mr Brian Quinn, chief 
executive and chairman-elect, 
called the result “ outstanding,” 
given a SO per cent Increase in 
tax paid by the group and the 
general impact of government 
economic policies depressing 
domestic demand. 

The better result was due 
principally to a much improved 
performance from the busi- 
nesses which were part of the 
Myer group taken over by G. J. 
Coles in a Aglbn deal in 1985. 

Profits from the Myer stores 
themselves rose almost two-and- 
a-half times, and from the 
Grace Bros department store 
by 22 per cent The biggest 


increase in sales was shown in 
tire discount stores sector. 

Als o contributing to the 
improvement was a 22 per cent 
fall in interest charges, thanks 
to lower rates and the use of 
interest rate sways and futures. 

Some of the improvement 
also appears to be due to the 
faltering course of Coles 
Myer’s competitors, notably 
Woolworth’s -which recently 
reported a half-year loss. Coles 
Myer’s market share of Aus- 
tralian retail sales has now 
risen above 20 per cent. 

In the course of the year 
Coles Myer opened 88 new 
stores and bought 25 (the Bi 


Lo supermarket chain in South 
Australia), but it closed 57 
stores and sold 79 (through the 
disposal of Country Road). It 
now has 1,507 stores in opera- 
tion. 

On the outlook the group 
said a “satisfactory" result 
was expected for the first half 
of the current year, even 
though consumer spending re- 
mained soft 

No plans axe yet in place for 
expan son abroad, a move pre- 
viously signalled by the listing 
of Coles Myer shares in London 
earlier this year. However, the 
room for the group to re-invest 
its flow in Australia is be- 
coming increasingly limited. 


Profits plummet at Australian Airlines 


BY OUR SYDNEY CORRESPONDENT 


THE SALE of six surplus 
aircraft has countered a Sharp 
fall in operating profit at 
Australian Airlines, helping the 
state-owned domestic carrier to 
report a record bottom line 
profit of A$39u£cn (US$2&9xn) 
for the year to Jane. 

Figures released yesterday 
show that the airline, which 
competes against the privately- 
owned Ansett under the 
country's two-airline policy, 
managed an operating profit of 
just AJIO.Om — little more 
than one-third of the previous 
year's A$30Tm. 

The result reflected the 
added Interest and depreciation 


burden of A$43m caused by the 
purchase of 12 new Boeing 737 
aircraft 

Though this was offset by the 
sale of two Boeing 727s, three 
DC-9s and one Airbus A-300 — 
which contributed heavily to 
extraopdinary earnings of 
A?28.2in for the year — the 
figures underscore the difficulty 
the undercapitalised 
faces in purchasing new air- 
craft 

Currently a A$600m order for 
nine Airbus A-320s hangs in the 
balance because the carrier 
needs a fresh equity Injection. 
The Government's continuing 
budgetary constraints have 


prompted intense speculation 
that the airline will he 
privatised. 

At A39.2m, the overall profit 
figure was 37 per cent higher 
than the A$37Bm reported the 
previous year, when extra- 
ordinary items contributed 
A*7.4m. 

It also represented a SO per 
cent return on paid-up capital 
of ASltthn, the airline said. It 
added that the expected divi- 
dend of A$18JJm would give the 
federal Government a "healthy” 
14 per cent on its investments. 

Mr Neil Smith, the chairman, 
said the airline carried a 
record 51m passengers during 


the year and topped the 5bn 
mark for the first time in 
passenger-kilometre perform- 
ance. 

In an oblique reference to the 
expected end of the two-airline 
policy and the airline’s possible 
privatisation, he said the airline 
had taken “ very firm ” steps to 
Improve efficiency and profit- 
ability to prepare it for a more 
competitive future. 

The loss-making Air Queens- 
land had been closed down and 
unprofitable routes had been 
cut out, he said. A “major 
profit improvement review pro- 
gramme " was also under way. 


Nissan Iberica 
sales rise 

NISSAN-MOTOR Iberica has 
increased first-half sales by 39 
per cent on those for the cor- 
responding period last year, 
AF-DI reports from Barcelona. 

Revenues were up by 36 per 
cent to Pta 50.6bn (5420m). a 
gain of Pta 13 .8 bn on 1986 
figures. 

The company said first-half 
profits were about Pta 600m 
and projected full-year profits 
of PtHlfibiL Sales were expec- 
ted to exceed 100,000 cars. 

The Spanish -Japanese com- 
pany, in which Nissan holds 
an 82 per cent stake, posted 
losses of Pta 8.4bn last year. 


Malaysian merchant bank to seek listing 


ARAB-MALAYSIAN Merchant 
Bank, based in Malaysia, is to 
seek a listing on the Kuala 
Lumpur Stock Exchange at the 
end of 1987, Reuter reports 
from Koala Lumpur. 

Tunku Naquiyuddin Tuanko 
Ja'afar, a leading shareholder 
in the bank, said AMMB bad 
earned a pretax profit of 45m 
ringgit (US$l8m) for the year 
to the end of March 1987, up 
from 30.6m ringgit in 1985/88. 
Tunku Naquiyuddin is chair- 
man of NT AH Holdings, which 
owns 20 per cent of AMMB. 

.The Arab-Malaysian Develop- 
ment Bank, which owns 45 per 
cent of AMMB, said in March 


that 'AMMB was considering 
going public. The remaining 35 
per cent of AMMB is owned by 
Mr Azman Haahim, a prominent 
banker. 

The price-earnings ratio of 
AMMB shares on listing would 
be about eight, Tunku 
Naquiyuddin said, without 
giving details. AMMB execu- 
tives declined to comment. 

The bank has paid-up capital 


of 80m ringgit and at the end 
of March 1986 its assets were 
worth 3.46bn ringgit. With 
finance, Insurance, securities 
and leasing subsidiaries, it. has 
been making impressive profits 
since 1982. 

Tokal Bank of Japan has 
signed an agreement to buy a 
20 per emit stake of AMMB 
from Azman, but the authorities 
have yet to approve the sale. 


Wyllie cuts 
stake in 
Chinese 
Estates 

By David DodwdH In Hong Kong 

ASIA SECURITIES Inter- 
national, the Hong Kong- 
based flagship company of Mr 
Bill Wyllie, the Australian 
financier, yesterday sold 100m 
shares In Chinese Estates, a 
property group controlled by 
Mr Joseph Lao. 

The shares were sold at 
HK82JL apiece to fin a n c i al 
institutions in Hong Kong, 
London and New York, the 
company said, raising 
BKSZlQm. (VS $2&9m> with- 
out costs and reducing Mr 
Wyllie's stake in the company 
from just over 20 per cent to 
10.4 per cent. 

Mr Wyllie said the trans- 
action eliminates all of Asia 
Securities' debt, and talked of 
"enormous flexibility” for 
wMMiig acquisitions where it 
has full, rather than partial, 
control- . 

Mr Wyllie controls BSR, 
the ewe-defunct UK group 
that is now one of Hong 
Kong’s leading electronics 
manufacturers, and the Regal 
Hotels group. 

Mr Thomas 1 -m, brother of 
Joseph Imn, Is expected to 
replace Mr Wyllie as chair- 
man of Chinese Estates. 


Advisers to Air NZ 
share sale named 

THE New Zealand Govern- 
ment has appointed a consor- 
tium of Jarden and Co., First 
Boston Inc FSC and Credit 
Suisse First Boston to advise 
on the sale or shares In Air 
New Zealand, the state-owned 
airline, Reuter reports from 
Wellington. 

The advisers will examine 
options available to maximise 
both the return to the 
Government from its 25 per 
cent stake and the value of 
tts remaining 75 per eent 
holding. The consortium must 
complete the transaction by 
March 31 1988. 


Notice of Redemption 
Negotiable Floating Rate Dollar Certificates 
of Deposit issued 2 May 1984, due 8 May 1989, 
optionally callable 6 November 1987 

ole 

BANCO DI ROMA 

(Incorporated wtlb limited liability in 
the Republic of Italy) 

London Branch 

NOTICE IS HEREBY GIVEN that pursuant to Clause 3 of the 
Negotiable Floating Rate Certificates of Deposit Issued 2 May 
1984. due 8 May 198 9 and optionally callable 6 November 1987 
(the "Certificates of Deposit") Banco di Roma has elected to 
redeem on 6 November 1987 (the "Redemption Date") all of 
the outstanding Certificates of Deposit at a redemption price 
equal to the principal amount thereof plus interest accrued to 
the Redemption Data. On and after the Redemption Date, interest 
on the Certificates of Deposit will cease to accrue. The Certificates 
of Deposit should be presented and surrendered to the London 
Brandi of Banco di Roma at 14/18 East cheap, London EC3M 1JY. 


September If 1907 
Banco di Roma 
London Brandi 


14/18 Eeetchsap 
London EC3M 1J 


BANCO BI ROMA 


JY 


Caisse Nationale des 
Telecommunications 

£20,000,000 

1214 per cent. Guaranteed Notes 1989 

NOTICE OF EARLY REDEMPTION 

On behalf of (he issuer, S. G. warbutg & Co. Ltd. hereby gh>es notice bo 
holders of the above-mentioned Notes of the Issuers election ro 
redeem all oucsondii# Notes on 15th October, 1987, in accordance 
whh Condition 6(b) of the Notes. 

Consequently on 15Ui October, 1987 there will become due 
and payable upon ewh outstanding Note 101 percent of the principal 
amount thereof, together with accrued interest to said date, at the office 


This announcement appears as a matter of record only. 


\ 



The National Power Company 
Iceland 

US$ 40,000,000 
Multicurrency Loan Facility 


Arranged by 

Hambros Bank Limited 


Algemene Bank Nederland N.V. 
Hie Fnj! Bank, Limited 


ofe- 


S. G. Warburg & Co. Ltd. 
Paying Agency, 6th Floor, 
1 Finsbury/ 


jury Avenue, 

London EC2M 2 PA 

or at the office of one of the other paying agents named on the Notes. 

Interest will cease to accrue on all outstanding Notes on 15th October. 
1987 and unmanned Coupons (whether or not attached to Notes jshan 
become void on such redemption and no payment shall be made in 
respecr thereof Notes and manned Coupons will became void upon 
expiry of four years from the first day of January nett following jthe date 
on which such Notes and Coupons respectively become due and 
payable. 

Mb September, 1987 


The Sanwa Bank Limited 
U.S. $50,000,000.00 

Callable Negotiable Floating Rate 
Dollar Certificate of Deposit - 
Due 26th October 1988 
Callable at the Issuers Option 
on the 28rd October 1087 

In accortfcmre with the tmoss^ out to the CoifficitesSaawa 

Bazik Ltd have elected to ettrdse their Call option. The 
Certificates win therefore mature on the Sk&G c s ofter 1S87, 
and payment wfll be effected, on the Principal amount plus 

Interest at 7JB75SB pa. at SMwaBarUcIXd,Irex^ 

Sanwa Bank limited 
Landau Breach 


Provided by 

Banque Indosuez 
Hambros Bank limited 
The Mitsui Bank, Limited 
The Taiyo Kobe B ank, limited 

Agent Bank 

H a mb ros Bank limited 

September, 1987 


J 




25 


Financial Times Friday September 11 1987 




*tes 

sSSSt 


JPifa-.N . 

•»os £ be- 

.Sijgf; 

Wtjfo, . 

fe-c/t 

sers to A»\, 

DaniiJ 


** Zeal*., 
» aPPobS.^ 

«f*E yyS 

> FBC 2j 
F j"* *sutf 

•.. „ " ■«*$. 

^•«es 

wsa s 
^•■'at :rua & *1 

2 J;a^j Tj 
;. Ti- sewto. 
•■‘ :!m 
:*<> ^ 


These securities have been sold owside the United States of America and Japan. This announcement 
appears as a matter of record only. 


8th September, 1987 


National/Panasonic 

Panasonic Capital Corporation 


U.S.$300,000,000 

9% Guaranteed Notes Due 1992 

unconditionally and irrevocably 
and 

jointly and severally guaranteed by 

Matsushita Electric Industrial Co., Ltd. 

and 

Matsushita Electric Corporation of America 


Issue Price 10116% 


Nomura International Limited 

Salomon Brothers International Limited Mitsubishi Trust International Limited 

Yamakhi International (Europe) Limited Credit Suisse First Boston Limited 

Chase Investment Bank 


Dahva Europe Limited 
Sumitomo Finance Internationa! 

Algemene Bank Nederland N.V. 

Bankers Trust International Limited 
Banque Paribas Capital Markets Limited 
Cosmo Securities (Eun^e) Limited 
Deutsche Bank Capital Markets l imited 
Goldman Sachs International Corp. 

Klein wort Benson limited 
Manufacturers Hanover Limited 
Morgan Stanley International 
-New Japan Securities Europe limited 
Prudential-Bache Capital Funding 
SocteteG&terale 

SwfesBank Corporation International Limited 
Wako International (Europe) Limited 


The Nikko Securities Co., (Europe) Ltd. 

IBJ International Limited 
Bank of Tokyo Capital Markets Group 
Banque Bruxelles Lambert S.A. 
Chemical Bank International Group 
County NatWest Limited 
Dnsilnpr Rank Alctipngemlisfinifl 
Kidder, Peabody International Limited 
Kyowa Bank Nederland N.V. 
Morgan Guaranty Ltd 
National Securities of Japan (Europe) Limited 
Nippon Kangyo Kakumaru (Europe) Limited 
Sanyo International Limited 
Sumitomo Trust International Limit ed 
Union Bank of Switzerland (Securities) TJmfrpH 
S.G. Warburg Securities 


These securities have been said outside the United States of America and Japan. This announcement 
■ appears as a master of record only. 


9th September, 1987 



YAMAHA MOTOR CO., LTD. 

U.S.$100,000,000 

314 per cent. Guaranteed Notes due 1992 

with 

Warrants 

to subscribe for shares of common stock of Yamaha Motor Co., Ltd. 
The Notes will be unconditionally and irrevocably guaranteed by 

The Fuji Bank, Limited 


Issue Price 100 per cent. 


Nomura International Limited 


DKB International Limited 


Bank of Tokyo Capital Markets Group 
KOKUSAI Europe Limited 
Sanyo International Limited 
Yamakhi International (Europe) Limited 
Credit Lyonnais 

Ichiyoshl International (H.K.) Limited 
Mitsui Finance International Limited 
Nippon Kangyo Kakumaru (Europe) Limited 
Shizuoka Finance (H.K.) Limited 
Towa International Limited Ui 


Merrill Lynch Capital Markets 

Fuji International Finance Limited 
Manufacturers Hanover Limited 
Sumitomo Finance International 
Bankers Trust International Limited 
Goldman Sachs International Corp. 

Meiko Europe Limited 
Mitsui Trust International Limited 
ed Salomon Brothers International Limited 
Sumitomo Trust International Limited 
Union Bank of Switzerland (Securities) Limited 




These securities have been sold outside the United States of America and Japan. This announcement 
appears as a matter of record only. 


9th September, 1987 


These securities have been sold outside die United States of America and Japan. This announcement 
appears as a matter of record only. 


10th September, 1987 


i. iv 

f. “ 


NIPPON DENKO CO., LTD. 

U.S.$70,000,000 

3 Vi per cent. Guaranteed Bonds 1992 


4^/IOKI 

AOKI CORPORATION 

U.S.$100,000,000 

3Vt per cent. Guaranteed Notes due 1992 


Warrants 

to subscribe for shares of common stock of Nippon Denko Co., Ltd. 

Payments of principal of and interest on the Bonds being unconditionally and irrevocably 

guaranteed by 

The Fuji Bank, Limited 


Warrants 

to subscribe for shares of common stock of AOKI CORPORATION 


The Notes w31 be unconditionally and irrevocably guaranteed by 

The Kyowa Bank, Ltd. 


Issue Price 100 per cent. 


Issue Price 100 per cent. 


NomnralnternatibnalLimited 

Tokai International Limited 
Chub, Trust International Limited 
Iduyosh! International (H.K.) Limited 
KOKUSAI Europe limited 
Merrill LynchCapital Markets 
Morgan Grenfell & Co. Limited 
Sanyo Inter national limited 
Taihdyo Europe Limited 


Fuji International Finance Limited 

Yamaichi International (Europe) Limited 
Cosmo Securities (Europe) Limited 
Kleinwort Benson Limited 
Marnman Securities (Europe) Limited 
Mitsubishi Trust International Limited 
Salomon Brothers International Limited 

Swiss Volksbank 
Towa International Limited 


Yasuda Trust Europe Limited 


Nomura International United 

Algemene Bank Nederiand N.V. 
Banque Brnxdks Lambert S A. 

BNP Capital Markets Limited 
County NatWest limited 
Kleinwort Benson limited 
Kyowa Bank Nederland N.V. 

Mitsui Finance International limited 
New Japan Securities Europe limite d 
Salomon Brothers International limited 
Swiss Volksbank 


IBJ International limited 

Bank of Tokyo Capital Markets Group 
Banque Indosuez 
Cosmo Securities (Europe) Limited 
Kidder, Peabody Inter national limited 
KOKUSAI Europe limited 
Merrill Lynch Capital Markets 
Morgan Grenfell & Co. Limited 
Okasan Inte rnational (Europe) limited 
Sanwa International Looted 
Westdentsche Landesbank Girozeatrafe 





26 


Financial Times Friday September 11 1987 


INTERNATIONAL CAPITAL MARKETS and COMPANIES 


Spain’s tobacco monopoly has begun to diversify. Tom Borns reports BSN cements 

Tabacalera acquires a new image ^’“ r *2l ding 


CONVENTIONAL wisdom had 
it that the big Spanish mono- 
polies, nurtured in the warm 
atmosphere of state protec- 
tionism, would catch the cor- 
porate equivalent of pneumonia 
the moment they were exposed 
to the cold, competitive winds 
of the European Comunity. 

Tabacalera, the Spanish 
tobacco monopoly, is deter- 
mined to disprove such doom- 
laden projections. 

Riding high on the crest of 
a joint venture with Nabisco 
Brands Espafta, the Spanish 
arm of R. J. R. Nabisco, die US 
multinational, Tabacalera is 
awash with cash and grooming 
itself tor further diversification. 

Tabacalera’s position as 
Spain's monopoly supplier came 
to an end in January 1986 when 
the country joined the Euro- 
pean Community and agreed to 
a steady dismantling of tobacco 
trade barriers. 

This has forced the company 
to acquire new skills and new 
partners, of which the Pta 6.21m 
(951m) deal giving Tabacalera 
a half share in Nabisco Brands 
Espana and taking it into food 
processing, is perhaps the 
culmination. 

For RJR Nabisco the deal, 
announced earlier this year, 
provides entry into the Spanish 
market in partnership with a 
well-entrenched domestic com- 
pany with an unparalleled 
national distribution system 
and — through the state paren- 
tage — close links with the 
administration. 

Above all the venture gives 
RJR Nabisco a distinct edge 


in the race for a major foreign 
stake in Spain's rich agri- 
business. 

Under the terms of Spain’s 
entry to the EC, an import 
quota of 150m packets of cigar- 
ettes was agreed, with the figure 
increasing by 20 per cent every 
year until 1992 when the 


a range of products that kept 
pace with Spain’s growing pro- 
sperity and evolving taste. 

Last year Tabacalera was 
almost embarrassingly healthy, 
lifting profits by 300 per cent 
to Pta 5Bbn on sales of 
Pta 326bn. Company executives 
expect even better results in 


Tabacalera, its morale bolstered by 
strong profits, is ready to meet head 
on the competition arising from Spain’s 
admission to the EC 


Spanish tobacco market, like 
all others In Spain, would be- 
come fully liberalised. 

Of all the European indust- 
ries that have been spilling 
into Spain in the wake of the 
tumbling tariff harriers, the 
tobacco companies have per- 
haps been the least successful 
in gaining local market share. 

Despite an aggressive adver- 
tising campaign only 15m 
packets of non-Spainsh cigar- 
ettes are being sold, a tenth of 
the agreed first-year quota and 
only a sixth of Tabacalera’s own 
export volume. 

In part; this experience has 
shown just how entrenched the 
Spanish tobacco market is. But 
it also reflects the painstaking 
pl anning with which Tabacalera 
anticipated the effects of EC 
membership. 

It avoided the main pitfall 
of a monopoly company when it 
began, a decade ago, to develop 


1987 following profits of 
Pta 2.2bn in the first quarter. 

The RJR Nabisco joint ven- 
ture is Tabacalera’s first major 
move away from tobacco and 
the group intends to move 
slowly in its new trading area. 

A “step by step” approach — 
as Mr Manuel Gago, Tabaca- 
lera’s senior development 
executive, puts it — is very 
much a byword in the company. 
There is talk in Madrid that 
about 150 potential acquisitions 
have come under Tabacalera’s 
scrutiny but there is no rush 
to buy. 

Mr Gago says: “We are not 
interested in just acquiring 
food proceeding companies. We 
want to buy businessmen, man- 
agers and know how. We want 
to learn.” 

The real challenge is to 
inject an entrepreneurial spirit 
into the company for, as Mr 
Gago says somewhat regret- 
fully, “living under a state 


umbrella is part of our culture." 

Rubbing shoulders with the 
giants of BAT, Reynolds and 
the rest has created in Tabaca- 
lera a fixation about mnltina- 
tionalism. It is listed on the 
Madrid bourse and about 16 
per cent of its shares are 
foreign owned. The Spanish 
Government has a controlling 
50 per cent stake. 

It took a step towards inter- 
nationalisation earlier this year 
when it bought a 24 per cent 
stake in Tobacos de Filipinas, 
a Spanish trading company and 
a major Tabacalera supplier. 

An attempt to move into the 
wine sector was rebuffed in 
June when Tabacalera narrowly 
failed to acquire the Williams 
and Humbert sherry company. 

While future assaults on 
beverages are not ruled out, the 
company is currently concen- 
trating on the transformation of 
cereals, according to the guide- 
lines of the Nabisco agreement 
to produce biscuits and snacks. 

At the same time it is anxious 
to capitalise on a overhaul of 
its distribution network, involv- 
ing computerisation and the 
replacement of a staggering 570 
local storage centres by just 
seven strategically located and 
massive warehouses, to move 
strongly into the distribution 
sector. 

The company, which makes no 
bones about group plans to 
move into financial services,, 
forecasts that within the next 
decade just 50 per cent of 
Tabacalera’s revenue will be 
based on tobacco. 


CGE to buy copper wire 
operation from Thomson 


Fermenta share trading on 
Stockholm market halted 


BY GEORGE GRAHAM IN PARIS 

CGE, the recently privatised < 
French telecommunications and < 
engineering group, is to buy « 
the copper wire operations of 
Thomson, the electronics com- i 
pany still under the wing of i 
the French state. 

Mr Pierre Suard, chairman of 1 
CGE, said the acquisition was < 
an important step towards the • 
integration of the group’s cable « 
production activities. 4 

The group has also announced 1 
plans to sell Ceraver, its glass 
insulator subsidiary, to Fidenza ; 
Vetraria, offshoot of the Italian I 
group Partidpazione Finasmere < 
e Industrial/ (PAF). • 

CGE recently surprised i 
French analysts by buying 4 
from Sir James Goldsmith his i 


BY SARA WEBB IN STOCKHOLM 


controlling stake in tire finan- 
cial holding company Generate 
Occidentale. but Mr Suard said 
the purchase of Thomson 
Cuivre showed it was still 
interested in mature industries. 

Thomson Cuivre, together 
with Cableries de Lens, COE’S 
existing copper wire operation, 
will give the group total pro- 
duction capacity of 280,000 
tonnes a year, making vt one of 
the world’s leading producers. 

Because of copper supply 
agreements with Chile and 
Zambia, which give the two 
countries the right to market 
some of the production, CGE 
will only control about 160,000 
tonnes a year of the copper 
wire output. 


FERMENTA. the embattled 
Swedish antibiotics and 
chemicals group, yesterday 
halted trading in its shares on 
the nnnfBriai market in 
Stockholm. It said further 
information would be provided 
on Monday, if not before. 

Fermenta’* management has 
continued to . hold discussions 
with representatives of Trans- 
Resources (TRI), the privately- 
owned US holding company 
which two weeks ago abandoned 
its planned SKr 1.38bn (8217m) 
bid to take over Fermenta. 

The takeover plan, which 
would have made the company’s 
future uncertai n, met with 
opposition from PKbanken and 
Svenska Han delsb anken , which 


objected to TRTs proposed 
methods of repaying Fennenta’s 
bank loans. 

Fermenta said yesterday that 
it was still “willing to listen 
to what TRI has to say” and , 
admitted the US holding com- 
pany was interested in acquiring 
a large part of Fermenta. 

One possibility is that TRI 
could try to buy all of 
Fennenta’s factories and sub- 
sidiaries without buying shares 

The company said that the 
halt in trading was not con- 
nected to “any financial diffi- 
culties.” Fermenta was saved 
from the brink of fhnmni*l 
collapse earlier this year after 
* new share issue raised 
SKr 595m. 


This announcement appears solely for purposes of information. 


NEW ISSUE 


August 27, 1987 


HoechstB 

$250,000,000 

Hoechst Celanese Corporation 


9 %% Notes Due 1999 


The First Boston Corporation 

Dillon, Read & Co. Inc. 

Goldman, Sachs & Go. 


ABD Securities Corporation Deutsche Bank Capital 

CnrynrUhiii 

Merrill Lynch Capital Markets 


Salomon Brothers Inc 
Amhold and S. Bleichroeder, Inc. 
Daiwa Securities America Inc . 
E.F. Hatton & Company Inc. 


Lazard Fr&res & Co. 

EuroPartners Securities Corporation 
Morgan Stanley & Co. 

mwy i nM 

Shearson Lehman Brothers Inc. 


Bear, Stearns & Co. Inc. 
Donal dson, Lqflrfq & Jenrette 

B iwiiM ii Cm WlLm 

IBJ International limited 


The Nikko Securities Co. Nomura Securities International, Inc. 

International. Inc. 


Alex. Brown & Sons 

mnwM 

Drexel Burnham Lambert 

hwpnM 

Kidder, ^Peabody & Go. 
PaineWebber Incorporated 


Prudential-Bache Capital Funding L.F. Rothschild & Co. Smith Barney, Harris Upturn & Co. 

Umcpentcd a — H Hi 

Swiss Bank Corporation International DBS Securities Inc. Wertheim Schroder & Co. 

Searittolna. 

Dean Witter Reynolds Inc. Yamaichi International (America), Inc. 


DBS Securities Inc. 


shareholding 
link with 
Agnellis 

By George Graham in Paris 
BSN, the leading French ' 
foods group, has cemented its 
alliance with the TtaHa rr 
Agnelli family through as 
exchange of shareholdings. 

The two groups, which 
teamed up in January to boy 
the San Geminl/Ferearelle 
mineral water concern, plan 
farther joint acquisitions In 
the Italian foods and drink 
industries, in the wake of 
their FFr 800m ($133m) 

cross shareholdings. 

Hr Antoine Riboud, BSN 
chairman, sa>d yesterday Smt 
his company had needed a 
local partner to make head- 
way In Italy. 

The successful co-operation 
on the San Gemini acquisi- 
tion had led to discussions 
on further perehases and on 
die exchange of dime stakes, 
he said. 

“In countries like Italy and 
Spain you need a godfather, 
and we decided to choose the 
best godfather possible,” be 
said. 

The Agnelli family wfll 
take a holding of just over 
4 per cent in BSN, white the 
French group will take 20 
per cent in Ifil Partedpa- 
done, an Agnelli family bold- 
ing company which controls 
6.7 per cent of the Fiat motor 
group. 

The transaction wfll involve 
Ifil subscribing to 223,900 
new BSN shares. 

The deal creates a bridge- 
head for BSN into the Italian 
foods sector, where it has re- 
cently been expanding its 
pasta interests. It brings Mr 
Riboad face to face with Mr 
Carlo de Benedetti, viewed as 
a threat by BSN since he 
the Bolton* food 
company from under its nooe 
far 1985. 

Hr Rlboud said the cress 
shareholdings avoided con- 
filets of interest when looking 
for future acquisitions, and 
gave him “his Italian pass- 
port.” BSN and Ifil would 
each be likely to take 50 per 
ce nt in any future purchases, 
as they had done with San 
Gemini. 

had done with San Gemini. 

It also enlarged BSftPs core 
of friendly shareholders, 
which already includes inves- 
tors in Snaiu and B el g ium , he 
said. Mr Umberto Agnelli wffl 
join the BSN board. 


Norway restricts 
brokers in 
options dealing 

By Karen FOssfi fa- Oflo 
NORWAY'S Ministry of 
Finance is restricting the 
growth of tire fledglin g Nor- 
wegian options markets by 
phohlblting brokers from par- 
ticipating onto rules govern- 
ing trading are established. 

Two options markets — the 
Norwegian Option Market 
(NOM) and the Oslo Clearing 
Corporation— were recently 
established in Norway al- 
though the Oslo G e aring Cor- 
poration is the only one to 
begin trading. 

NOM says it wfll commence 
trading after the new regu- 
lations have been spelt out, 
early in 1988. 

The ministry says its move 
Is In accordance with an Oslo 
bourse request made earlier 
ttds year, when a committee 
was farmed to study the 
options market and make re- 
recommendations to 
the ministry. 

It would like to see the 
level of activity for options 
trading limited to private 
deals nude with private in- 
vestors, the ministry says. 

The consequences of the 
move for the Oslo Clearing 
Corporation could be “ hefty,” 
the company said. It plans to 
meet ministry officials on 
Monday. 

The Oslo bourse was In- 
vited by NOM to take a stake 
in the new market and moni- 
tor regulatory aspects. The 
Norwegian Brokers Associa- 
tion has a 45 per cent stake 
in NOM. 

Alfa-Laval bays 
UK groups 

fey Our S toddwl m Staff 
ALFA-LAVAL, the Swedish 
dairy equipment and process 
engineering gro u p, has 
acquired three UK flow equip- 
ment manufacturers Mn d an 
affiliated US sates company 
from Gallaber of the UK for 
an undisclosed sum. 

The acquisition* are 
intended to strengthen Alta- 
Laval’s position in the UK flow 
equipment market- — where It 
already has a small presence 
—and add a comptrintmtary 
range at pumps, valves and 
fittings for water and sewage 
treatment plants. 

Alfa-Laval said it would 
add Saunders Valve Co, SSP 
Pumps, and MGL the 
Oiicago-based sales and ser- 
vice company, to its e xi st ing 
flow equipment b ushtes s divi- 
siou. 

The three acquisitions are 
expected to lift sales at the 
Sow equipment division by SO 
per cent, to SKr Wbn 
<$L89m). 

afPL Pumps, which makes 
dosing pumps and has annual 
sates of about SKr 30m, wfll 
be added to AIXa-Laval’s 
dosing and analysing tech- 
nology division. 


World Bank launches five 
year Y50bn offering 


BY STEPtffiN RDLER, EUROMARKETS CORRESPONDENT 


THE WORLD BANK plunged 
into the turbulent waters of 
the Japanese yen bond market 
yesterday, launching a Y30bn 
issu e c arrying a five-year 
maturity. 

The issue, led by Nomura 
International, is the first in 
such size in the sector since 
June and carried a 5$ per cent 
coupon. It is priced at 10L 

The yen bond market has 
been extremely shaky for soma 
months, its latest declines 
sparked off by disclosures last 
week of heavy losses in bond 
futures trading by . Tateho 
f!hwTwieai industries: 

Yesterday, though, the market 
stabilised and Nomura launched 
tiie issue it was thought to have 
held off from bringing on Wed- 


The chances of success were 
enhanced by what was agreed 
to be a fair pricing, and a five- 
year maturity, which was widely 
thought to be shorter than the 
seven-year maturity the 
borrower had o riginally re- 
quested. 

Reflecting that, tire issue 
was quoted at a discount less 
than its fees of If point; 
although there were reports of 
scattered trades outside that 
level 

The issue prompted some 
selling by retail accounts in the 
five- and six-year area, but other- 
wise prices in the Euroyen 
sector were little changed on 
Wednesday. Yields in the 
Japanese govendnent bond 
market meanwhile, fell slightly 
to be quoted around 5.49 per 
cent late yesterday against 5.47 
per cent the day before. 

Nevertheless, attitudes to the 
yen market remain cautious 


both in Japan, where worries 
about inflation persist and insti- 
tutions are taking a low profile 
ahead of the end of their 
accounting half-year, and in 
Europe, where investors have 
been selling Euroyen paper 
over recent weeks. 

Dollar bonds, too, staged a 
short covering rally, thanks to 
some rebound of the dollar on 
the foreign exchanges. But 
activity was slow with the 


INTERNATIONAL 
BONDS 


market transfixed by the US 
trade figures for July due today. 
Forecasts centre on a deficit 
rimilar tO June's Of $15.7bn. 

The uncertainty following the 
sharp market declines of the 
last week or so could be the 
main reason why a widely- 
expected $lbn bond for Italy 
has not yet been brought to 
market. 

The talk suggested that a 
fixed-rate bond with a three- 
year maturity at 55-60 basis 
points over the equivalent US 
Treasury bond would be 
launched by Monday night, but 
Credit Suisse First Boston, the 
expected lead manager, would 
not comment. 

Dealers said that only such a 
Short maturity could be 
expected to find demand in 
current market conditions, bat 
if it were launched it would 
probably have been substanti- 
ally preplaced. They said many 
European fund managers were 
cash-rich because they have' 
stood back from the fixed- 
interest markets for some 
months now. 


That said, there were still 
predictions that retail demand 
would not return to the dollar 
bond markets until US Treasury 
yields passed 10 per cent.. The 
30-year bond was yielding 9.53 
per cent late yesterday after, 
noon after the day’s rally. 

In the West German market, 
prices also rallied, by about 1 
point on average. Much of this 
was due to short covermg, 
although some retail investors 
were said to have emerged. 

The Swiss foreign bond 
market was again mixed in 
quiet trading, while in the dom- 
estic bond market the average 
yield rose one basis point to 
4JS2, per cent. 

A SFr 150m issue for Staton, 
carrying a 5 per cent coupon 
and 16 -year maturity, dosed its 
first day’s trading at 95$, 4$ 
points below its issue price. 

Compagnie Bancaire, the 
French financing company, 
launched a SFr 120 m, five-year 
private placement with a 4J per 
cent coupon and a price of 100 } 
through Basque Paribas 
(Suisse). 

In French francs, Caisse 
Nitfonale des Telecommunica- 
tions launched a FFr 400m 
issue maturing in 1996 with a 
variable rate coupon, currently 
at 8.79 per cent, and a price of 
101. The lead manager is Credit 
Commercial de France, and the 
issue is fungible with FFr 600m 
of bonds issued in May 1986. 

In London, an equity warrants 
Issue was launched for Tokyo 
U t ak u tencbi, a department store 
and cinema. Tire $25m deal, 
guaranteed by Mitsui Bank. 
parrie d a five-year maturity and 
an indicated 3* per cent coupon 
and was led by Daiwa Europe. 


Landis seeks Swiss financier’s help 


by William duuporce in geneva 


AN INVITATION has been 
extended to Dr Stephan Schmid- 
heiny, tiie industrialist and 
financier, to help solve family 
ownership problems in Landis 
and Gyr, toe Swiss electronics 
and machinery company, which 
has just made a $132Jjm offer 
for tire larger part of Marie 
Controls Corporation of the US. 


Mr Heinz Hertach, Landis' 
general secretary, said - the 
possibility that Dr Schmid- 
heiny’s Anova group would take 
a shar eholding in ijmfts was 
being discussed. 

The Gyr family owns a con- 
trolling state of about 60. per 
cent in tendis. None. of. tire 
founder’s three daughters or 


grandchildren is currently 
active in tiie group, which 
underwent a senior management 
change and structural reorgani- 
sation two years ago. 

Dr Sdmudheiny, already a 
Landis board member, has 
played an important role in re- 
structuring Swiss industry in 
recent years. 


FT INTERNATIONAL BOND SERVICE 


Listed are tire latest internationa l bonds for which there is an adequate secondary market 

dosing prices on September 10 


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5'KS. 


Financial Times Friday September 11 1987 


This week has -seen property 
men queueing up to report 
progress do leisure. and special- 
ist retailing developments in 
London's West End. 


Two of the stories concerned 

three key sites adjoining each 

other on a triangular patch 
bounded by Piccadilly Circus, 
Shaftesbury- Avenue, Wardour 
Street and : Coventry Street 
which add up to a little over 
three acres and a present in- 
vestment value of well over 
eiOOm. 

This value was shown by the 
sale announced on Monday of 
The Trocadero and a neigh- 
bouring island site to Brent 
Walker, the fast-growing leisure 
and property development com- 
pany. for a cash consideration 
offSOm. 


This may be seen as a blessed 
relief by the vendors and devel- 
opers, Electricity Supply Nomi- 
nees (ESN), the electricity sup- 
ply industry's pension fond, 
which is suing Richard- Ellis 


chartered surveyors alleging 
negligent advice on the devel- 


negligent advice on the devel- 
opment 

It is certainly welcomed as a 
ray of sunshine at Ellis itself. 
Sources close to the firm are' 
saying that the all up cost to 
ESN of both sites, including 
land, construction and interest, 
was £80 m. 


Harefield 

Middlesex 

25 acre site adjacent 
to the hospital with 
potential for Research 
and Development 

Freehold 
For Sale 


MODERN OFFICE BLOCK 

FREEHOLD 

FOR SALE 

HENDON NW4 



SMITH 


aKbgSbMC.feJmcA 
' London SWIY4QZ ■ 

Tel -01-930 7321 


PRIME RETAIL UNITS 


HighVolume Trading Potential 
Susy Commuter Location 
Stylish New Facades 

For details please contact David Jackson 




THE PROPERTY MARKET 


m 


By William Cochrane 


' At the apex of the triangle is 
the relatively small London Pa- 
vilion, erected as a theatre in 
188 $. and used over the years as 
a live theatre, a musical hall 
and a cinema. 

Detailed plans for the Pavil- 
ion were disclosed sixteen 
months ago.Since then, the de- 
velopment programme has gone 
ahead so well that the building 
could be completed next March 
onrApril and open at the end or 
May or the beginning of June, 
four or five months ahead of tar- 
get. 

.Joint developers of the Pavil- 
■ ion are Paul Marber’s Grosven- 
,or Square Properties, now a 
subsidiary of Associated British 
Ports, and restaurateurs Kenne- 
dy Brookes. 

The triangular building will 
house three activities on seven 
levels. The top three doors will 
be devoted to a Rock Circus, a 
new exhibition by the Tussauds 
Group of the history of rock mu- 
sic from 1955 onwards. 

. On the second floor, Kennedy 
Brookes wiU operate a restau- 
rant which, it says, will seat be- 
tween 159 and 200 people and 
will open Cram 10 am until mid- 
night. 

Meanwhile, on the concourse, 
ground and first floors, joint let- 
ting agents Edward Erdman and 
Anthony Green & Spencer 1 are 
marketing 14,000 sq ft net of re- 


tailing in 29 shops averaging be- 
tween 400 and 500 sq ft of space 
each. 

The whole building only adds 
up to 56,000 sq ft gross but 
Charles Varah, an associate at 
Erdman, reckons it is a pivotal 
location, offering access by un- 
derground concourse not only 
to Piccadilly underground sta- 
tion but also to The Trocadero, 
the Criterion to the south, and 
the new pedestrian area around 
the statue of Eros. 


The Pavilion's retailing Is ex- 
pected to make a strong, and 
highly individual showing, 
something which has not been 
an obvious characteristic of the 
area in the past - at least where 
comparison shopping has been 
concerned. 



Turning over 
a new lease 


The London Pavilion: a ray of sunshine at Piccadilly Circus 


"Piccadilly and Leicester 
Square, historically, have not 
been regarded as retailing cen- 
tres in the same context as. say, ' 
Oxford Street,” says Mr Varah. 
Retailers themselves, in the 
past, have argued that the im- 
age of Soho, and hopelessly con- 
gested traffic, have driven cus- 
tomers away. 

However, Mr Edward Erdman 
hhnself, when he introduced 
the development sixteen 1 
months ago, said that he aimed 
to transcend that image - and, 
with architect Nigel Woolner of 
Chapman Taylor, to conceive 


the development on the lines of 
some of the fashionable shop- 
ping centres in the Champs Ely- 
see in Paris. 

All this should boost the re- 
tail rents, the more esoteric as- 
pects of which are discussed on 
the right Basic rents are going 
to be around £150 a square foot 
for the ground floor, where 
terms have already been agreed 
with Body Shop, H. Samuel and 
Acs is Jewellery. 

On the concourse, subject to 
both letting and merchandising 


has agreed terms on oue unit, 
with Scribbler. The first floor, 
be says, will go at 50 to 60 per 
cent of ground floor rents. 

Kennedy Brookes, mean- 


while, says that it is very happy 
with this, its first high profile 
venture in property. It took over 
the London Pavilion pic two 
years ago for £ 2 . 4m; recruited 
Ivan Stephenson as property di- 
rector - who had worked on a 
number of major sites in Picca- 
dilly for Richard Ellis; and 
brought in Grosvenor Square 
Properties as 50 per cent share- 
holders and development man- 
agers. 


problems, Mr Varah is looking' 
for basic rents at about 80 per 


for basic rents at about 80 per 
cent of ground floor level and 


Mr Stephenson said this week 
that the the estimated cost of 
the development, excluding the 
original acquisition cost but in- 
cluding finance and freehold, is 
expected to be around £16m. 
The expected rent roll has been 
estimated "very conservatively” 
at£L3m. 

Kennedy Brookes originally 
thought that the development 
■might be worth £22m, prior to 
the conversion of the 150 year 
lease to freehold. Now, it says, 
on the basis of the Brent Walker 
purchase price for The Trocad- 
ero this figure seems 'signifi- 
cantly undervalued”. 


THE SHOPS in the London Pa- 
vilion are being let on turn- 
over leases, in which the 
amount of rent payable will be 
related to the actual turnover 
achieved by the tenant 

This practice is common in 
the US and unusual in the UK, 
although Capital & Counties 
have pioneered it In their cen- 
tres at Eldon Square, Newcas- 
tle and elsewhere - while coin- 
cidentally, ESN employed the 
turnover lease in letting some 
space at The Trocadero. 

Ian North en of Capital & 
Counties, writing last autumn 
In Shopping Centre Horizons, 
the journal of the British 
Connell of Shopping Centres, 
said that a common criticism 
of turnover leases used to be 
that tending institutions were 
very conservative and would 
not like the additional risk of a 
shopping centre where income 
was subject to a degree of un- 
certainty. 

! He suspected, however, that 
jthe real problem was with the 
professional advisers: conser- 
vative valuation surveyors who 
were reluctant to get involved 
in new concepts; and ultra- 
conservative solicitors who 
could not find any precedents 
to assist them in the legal doc- 
umentation. 

Whatever the cause, some 
; sales resistance exists, and the 
fact that the developers decid- 
ed on turnover leases for the 
Pavilion a year ago suggests 


firstly that they know retailers 
badly want to get into these 
shops and secondly they see re- 
tailing being a gold mine in 
this location. 

The way it will work in the 
PavUioo is that base rents will 
be payable quarterly in ad- 
vance. If the agreed slice of 
turnover is higher than that 
says Charles Varah of Edward 
Erdman, the retailer will be li- 
able to make a top-up payment 
annually in arrears. 

The base rent will be re-, 
viewed every five years. At the 
end of that time the rent will 
move to whichever is the great- 
er of open market rental value 
or an agreed percentage of 
turnover, averaging the three 
best years of the previous five. 

In determining the turnover 
rent, according to Ian Nor then, 
the percentage should be var- 
ied from one type of retailing 
to another. A supermarket 
with high turnover and low 
margins might rate one or two 
per cent, while, on the other 
hand, a fashion trader with a 
high profit margin might pay 
12 per cent. 

Why turnover leases? Mr 
Northen said that they promote 
partnership between landlord 
and tenant, rather than con- 
frontation; that tenants will 
not be chosen simply on their 
ability to pay the highest rent; 
and that both landlords and 
tenants will share in the suc- 
cess and the disappointments 
of trade fluctuations. 



Jf7n V. i: >. ."l 


Company Notices 


KAWASAKI STEEL CORP. 
Japanese Yen I0,000,000j)00 
Reverse Floating Rate/fixed 
Rate Notes due 1996 


LAFARGE C0PPEE 
US$40,000,000 
15>2% 1981/1989 


CHARTERED SURVEYORS 


COLLIERS 

BIGWOOD 

&.BEWLAY 


84COLMORE ROW 
BIRMINGHAM B3 2HG 
TBBG 335146 


021-200 3111 


HARMONY GOLD 

COMPANY LIMITED 


(Incorporated in the Republic of South Africa) 
Company Registration Number 05/38232/06 


In accordance with die terms and 
condfoora of the Notes. <m hereby 
gtve notice dm the Yen Libor hr the 
period from 9di September 1987 to 
9di March 1988 was fixed at 4*6%. 
giving the Inter err Race Factor of 
10-877/360. On 9th Match 1988 
int e rest of Yen 30-213 wtU be due per 
Yen 1.000.000. 


CLIFTON VILLAS. LITTLE VENICE, W.9 

UN MODERNISED 

. Substantial residential bull dins, virtually detached. 

Garage and garden. Suitable as a residence or as flats 
etas stUUiu FREEHOLD 


DIVIDEND DECLARATION 

Notice is hereby given that Addend Na 62 ott i 5 cents per share has been dedared m South 


Atncan currency. at an Herein Oviifend hi respect oi the year end no 30 Jire, 1 388. 
members reasKred at iho dose Ot ausness or 25 September, 1987 The register of members 
wiU be dosed (ram 26 September to 4 October. 1887. nefcske. Dbitdend warrants wit be 
puled an or about 5 November. 1987. 

The rate d exchange of which the dividend wU be convened tno Untied Wnadom currency tor 
payment by me United Kingdom lepauars. transfer and part's aperts w* be the letegraprec 
transfer rate ol exchange between Johamestaut} and London ruing on the first business day 
after 26 September, 1987 on which foreign currency daafaigs are transacted. 


Bfoumc Beck FlindoB 


4 WcKuftM Terrace, 


Loadoa W24LW. 


01-2299262 


Luton 


Sundon Park Rd 


10.7 acres 
industrial land 
For Sale 


140,000 sq ft 
factory/ 
warehouse unit 
To Let 


Parker 


01-629 7666 


■ " (.nrftfr.nf Mn-ri 
U'ndi;n u l., Ji:l 


CHESTERFIELD 
FREEHOLD SHOP 
22/24 BURLINGTON 
STREET- - 

Situated In a prime multiple 
retailing pitch 

Frontage 32ft 

Ground Floor ■ 1,021 sq. ft. 

First Floor 897sq.fi 

Second Floor 479sq.fi 

Total, approximately 2^97 sq. ft 
FOR SALE 


7.1 pf .1 , 1 ■ J > Vvl • 


| ■ I 1 I EADON LOCKWOOD 

■ I I | i RIDDLE 


OaCompoLm 
3MRWdSI2Efi iSaSarSS 


The Tatyo Kobe Bank Limited 
London Brandi 
Agent Bank 

Dated: I Ith September 1987 


On August 28, 1987 Bonk tor (he aim*** of 
USS4,000,000 taw been drawn for rtdnnptian 
in the presence of a Horary Public. 

The Bonds will be redeemabtr crapon dee April 
15, 1988 and following attached on and after 
October 15. 1987. 

The drawn Bonds are those, HOT YET 
PREVIOUSLY REDEEMED, inch fed far the 
range beginning at 1386 UP to 5841 tad. 
Affluent out s tand i ng: US$12,000,000. Bonds 
previously drawn and not yet presented for 
redemption: 

26002 26038 to 26041 ed. 26197 to 26208 
lad. 26221 26246 to 26255 Ind. 26365 in 
26367 Ind. 

Laa n dw n ra, Septendier 11, 1987. 

The Fiscal Agent 
Krtd to tbufc 
SJL Lwemboorgeoise 


Where appheabie. Soutfi African non-restdeni shareholderer tax ot 15% wA be deducted 6om 
the dMtdervl 


The lul conditions of paynurt of (Ms dividend may be inspected at or obtaewd bom the 
Jonanresbuig or llneed Kingdom offices ot ttie company. 

By order ot die Board 
RAND MINES (MINNS & SERVICES) LIMITED 
S&cretanes 
per N. H. FL PITTS 


l l ei j Ia t e ra dO HItt 

15th Ftoor— The Comer Ftause 

63 Fox Straw 

Johannesburg 2001 

(PO Bon 62370. MarahaBown, 2107) 

United Kingdom lUyUtma . 

T inn ier raid Paying Agents: 

HU Samuel Registrars Lnrtted 
6 Groencoal Place 
London SW1P 1RL 


Saeretnrtee In the United Kingdom: 

Oorter CcnsoSdaJcd Services Lmrted 
40 Hoitom Viaduct 
London EC IP 1AJ 




10 September 1887 


A member of the 
Bartow Rand Group 


MV!l|i;i V| jrl'LIiTTE , M [tilj i 


Luxury furnished offices, prominent 
position, annual licence, rent Includes: 
rates, heating, lighting, cleaning- 

T e lephones installed. 


HXJNGERFORD 


TTonTT^ci : 1 1 ri 


AN IMPORTANT COMMERCIAL 
PROPERTY WITH ALTERNATIVE USE 
- • POTENTIAL INCLUDING 


EXISTING BUILDINGS OF SOME 25.000 
tq ft on 3-5 ACRES APPROXIMATELY 
ftreren fcrewQtt n prOrtpob tmd gamed r£o, a 

DBEWEA3T NEAH BESQHNIIAL 

(0635) 5Z3088 

SMB Marta* Place, Ne w bur y 
BtsUUre RGM SAZ 


ANGLOVAAL GROUP 


■GONMMB CLOBHQ OF THAIORn BOOKS 


ewwHiwa hi Ndwfraoiitai r ew ffl w ui toiiff 
i dnW fartbi partial ftaM tar tfa mw of 


mr» no. asoeaoau 
(Btft Me MW7WJW 


at*, to. aumtaoo 


1487 

30 tkeWer to 6 I 
13 w » Da 
lDhi U On 


MMdte WmMtnrH* 
iwaum fatal Leaned 
ZibeMMMg 


are» en. osroeaMXU 


mu. Mo. 0S4H4MW 


ffc* Ml SMMI40U 


Br O nht at He Boards 
aJKLD-TBMISVUL TRUSTEES LUarTEO 
Landoa Srcnurin 
inn L S. Fwiaer 


7f6 IwaSM 
London W1R 8ST 
U smmtor IW 


On Friday, 2B(h August 1907, we Incor- 
redly published an advertisement for 
The MHmMsM Bank, Limited, together 
wfth the correct advertisement. The cor- 
rect advertisement Is herewith repeated 
below. 


NOTICE TO THE HOLDERS OF 
THE OUTSTANDING 
US$100,000,000 2%% CONVERTIBLE 
BONDS DUE 2000 OF 

THE MITSUBISHI BANK, 
LIMITED 

Obc "teMdsf and the -■mr* nraecliNM 


NOTICE IS HEREBY GIVEN to the holders of 
the Bonk as hdtows: 

The Bank has isuerf 03 an 24th August, 
1987, 1355300,000^300 CoorertWe Bonds Due 
200Z, SFr 150,000,000 Convertible Bonds Due 
1994 and SFr 250,000,000 Convertible Notes 
Oue 199% In each ast comertAle into Shires 
of (he Bank, and (2) on 25th Aapn, 1987, 
30,000, 000 Stares of the Barit tbroo^i a public 
o ff ering In ispan. 

Poreoant in the Twins and CmdUons of the 
Bomb, the Comersttn Price has been adjusted 


from Yl, 715-70 to O) Y3.71430 efiectiw as 
from 24th AognL 1987. Tokjo time, to reflea 


the tone of the ConwttMe Bands md Notes, 
and (2) Y1.71L40 effective as of 25th R wpnt , 
1987, Tokyo doth, to reflert the bsoe of the 


?tb h AofpBt 1987 

THE MITSUBISHI BANK, UNITED 
As Primkal Paying Agent 


Legal Notice 


No. 003312 of 1987 
IN THE HIGH COURT OF JUSTICE 
CHANCERY DIVISION 
Mr Rrglsrar Bradbnrff 
IN THE MATTER OP 
GJt (HOLDINGS) PLC 
AMD IN THE MATTER OF 
THE COMPANIES ACT 1988 


UNREAD PUBLIC 
UNITED COMPANY 

NOTICE IS HEREBY GIVEN that the Share Tran- 
ter Books M the comparer win be dosed on Ttxwiav 
24th September 1487 f or the preparation of dividend 
warrants. 

BY ORDER OF THE BOARD 
K. J. Morris, 
Company Secretary 


NOTICE IS HEREBY GIVEN Dot a Petition was 
m the 2Mb Jane 1987 pmented to Her Maieitys 
Wgb Co art if Justice for the confhmatioa nf the 
reduction of the capital of the above-named 
Company from QJHMUXM to £2,950J)00 by 
re t m n hig capital which is in excess of the arnnts 
of 9 m sikl CoiifBoy. 

AND NOTICE IS FUVTMEH GIVEN that the aM 
Petition is tfireeted to be heard before the Hon- 
ourable Mr Justice Peter Gibson at the Royal 
Courts of Justice, Strand, Loudon WC2A 2LL, on 
Monday the 5th day ot October 1987. 

AMY Creditor or 5hmcholder nf the said Cnapmy 
dcsbhtg to oppose the maktag of an Order toe the 
continuation of the raM Redaction of Capital 
( should appear at the time of hearing hi persoa or 
Mr Coaasd for that pmpose. 

A copy of the sold Petition wM bo furnished to 
any such porson r egu hiog too some by the wader- 
mentioned Sofldtare oa payment of the regulated 
charge for the same. 

Dated this 7tb day of September 1987 
Rtf-.BZH. 

JAOUES AMD LEWIS, 
af 2 South Square. 

Gray'* Am. 

Loadoa WC1R 5HR. 

Solicitors for tire abov e a i me d 
Company. x 


Art Galleries 


■PUBLIC SPEAKING training and speech writing by 
award win n tag public sneaker. Fba lesson free. 
01-8396552. 


Clubs 


lesson free. 
THJBY 


EVE bas eatbed the others because of a 


SMELL GALLERIES. An ErWtollon of Russian and 
Scandinavun Palntioos. 43a Dot* Street. Sl 
J ames'S London, 5WL Teh 01-930 7744. 
f Mtm.-Fri.9J0-S.Sat.10-l. TH3BV 


lair play and value for money. Supper 
3JO am. Disco and top nnnlriini j 
tuniesses, excttlng Boors h ons. 189, 
w£ 01-734 0557. 


Hr Shoow Penney 0703 ZU600 
Beumemoutht 

Kr Martin Some ray 8202 299923 


FUt FA t T BB T/ BP FltE premises m 
Saulb Lo n don area. Telephone: Brian 
01-546 131A. 



In ternationat 
Property 


EDWARDSYMMONS 


.“^^HonRoaq 
L OftdofjsWfViDH 


LONDON MANCHESTER UVERPOOL BRISTOL 


01-8348454 


; We have substantial clients 
seeking to acquire 

(i) Property Companies 
(it> Property Portfolios 
£75,000 to £1,000,000 

Replies in strictest confidence to M. J. Canniford. ARICS 




€0 rooms, bar, reataortat, swimming 
pool, superb location on sandy tropical 
tasrii High quality construction over- 
seen by an experienced Swtes company. 
Aval table Autumn 1988. Price 

USSI 1.000.000. 

Serious enquiries should be tfireeted fa 
SARFI P-O. Box 45ft- CH-1215 
GENEVA 15 Airport “ ‘ ‘ “ 





■THE ROYAL ACADEMY OF ARTS. PkcaSlly, Wl. 


Open with 20th SeptenOer. Daily Uam-7pm 
except Sunday ZOtti LLanHtom- Admission £5 50 


FOR SALE 
MULTIPLE CARDS 
SHOPS BUSINESS 
SOUTH EAST ENGLAND 


Write Bex T&543 
Financial Times 

10 Carmen Street, London, EC4P 4BY 
Thick 


SOCIETE GENERALE 
JfFY 7.500.000.000 
REVERSE FLOATING 
RATE NOTES 
DUE 1991 


For the six months, Septem- 
ber 8, 1987 to March 7, 
1988. the rate of interest has 
been fixed ai 4.187596. 


The interest due on March 
8, 1988 against coupon nr 3 
will be JPY 409.223 and has 
been computed according to 
the terms and conditions of 
the bonds. 


THE PRINCIPAL 
PAYING AGENT 
SOCIETE GENERALE 
ALSAC1ENNE DE 
BANQUE 

15. Avenue Emile Reuter 
LUXEMBOURG 


TO THE 
TOYOSASH CO^ LTD. 


W a r ran ts Co subscribe far 
sharer of Common Stock of 
Toy® Sash Co, Led. Issued in 
conjunction with am Issue of 
USS 100.000,000 IWC Bonds 
doe 1992 


Pursuant to the Paying and 
Warrant Agency Agreement 
dgted 30th Jreie 1987. notice s 
hereby green as faflows 
I. On 22nd July 1987. the Board 
of Di r ectors of the Company 
resolved to make free 
dbcrfiiudon of shares of in 
Common Stock to ti i arehoktert 
of record as of 30th September 
1987 (Japan time) at the rate of 
I dure for lOdureshekL 


2. Accordingly the was t ed 
Subscription Price per share of 
the above-mentioned Warrants 
wifi be Yen 6,057.30 per share 
of Common Stock. wKh effect 
from Ik October 1987 (Japan 
time). 


TOYO SASH CO-, LTD 

Or- 

TheTadyo Kobe Bank Limited 
Principal Paring Agent 
Dared: I Ith September 1987 


Business for Sale 


TROJAN INTERNATIONAL 


For sale by the administrative receivers as a going 
concern: 

* £2m turnover Food Exporter based at Gatwick; 

* Quality customer list principally in Africa and the 
Middle East 

For further details contact the Joint Administrative 
Receiver: 

R. H. OLDFIELD, P.0. Box 486 


(WPS 


Peat Marwick McLintock 


I Puddle Dock, Blackfriars, London EC4V3PD 
Telephone: (01 ) 236 8000 Telex: 881 1541 


General Appointments 


CLIENT’S OFFICE REQUIREMENT 
8,000-20,000 SQ. FT. 
MAYFAIR or ST. JAMES’S 

Please contact E. Lesley on 935 2811 


HOWARD CHARLES 
& PARTNERS . Wl 


CHARTERED SURVEYORS 


ASSOCIATE -INVESTMENT BANKING 


An expanefirti international Investment group requires individual responsible for < 
marketing and execution of corporate finance sendees with respect to major 
Scandinavian clients Involving short and long term debt financing, equity 
financing, M&A advice and execution, options and financial futures 
Necessitates fluent Swedish and familiarity with Scandinavian culture and 
business practices 

Minimum 2 yews' relevant business experience 
Education to MBA standard. Age 25-30 


Write Box AO&59, 

Financial Times, JO Cannot] Street, London EC4P 4BY. 


FT- Actuaries 
World Indices 


A 59-page booklet giving details of the index coverage and 
selection process, together with technical appendices, can 
be obtained free of charge by sending a (48pj stamped, 
addressed A4 size envelope to: 

Miss Lorraine Spong 
Fbndal Times, Publicity Department 
Bracken House, 10, Cannon Street 
London EC4P 4BY 


CLASSIFIED ADVERTISEMENT RATES 


Appointments 

CortWKrteal and Industrial Property 
Saturday Property 
Residential Property 
Business Opportunities 
Business for SalWWanted 
Personal 

Motor Cars, Trawl 
Contracts, Tenders 
Book Page 
Panel 


ftv line 
(nun. 3 lines) 
t 

12J0 

1200 

£00 

9-50 

13.00 

12.00 
9-50 
950 
12-DO 


Single utm m 


fiHm. 3 eml 

c 

43.00 
4L00 

25.00 
32X0 

44.00 
4 LOO 

32.00 
3250 
4 LOO 

22.00 
30.00 


Premtem positions available £0 per Stogie Column cm extra (Min 30 ons). 

AH prices exclude VAT 
For further details write to: 

Classified Advertisement Manager 
FINANCIAL TIMES. 10 CANNON STREET. LONDON EC4P 4BY 



















28 


Financial Times Friday September '1-1 1987 


UK COMPANY NEWS 


FOREIGN SHAREHOLDERS MOVE TO PERMITTED CEILING 

Rolls-Royce profits up by 13% 


BY MICHAEL DONNE, AEROSPACE CORRE5PONDB4T 


ROLLS-ROYCE, the aero-engine 
manufacturer, earned pre-tax 
profits of £BOm in the first half 
of the current year, up £7m 
on the comparable £53m for 
the Erst half of 1986. Pre-tax 
profits for 1986 as a whole 
were £120m. 

Announcing the result yes- 
terday, Sir Francis Tombs, 
chairman, said that in the 
period (24 weeks) turnover was 
up by 15 per cent from £7 84m 
to £899m. while the operating 
profit of £l52m showed a 28 
per cent gain from last year's 
first half of £119m. The full 
1986 operating profit was 
£273m. 

The company, recently priva-v 


tised, has not published half- 
year figures for many years. Sir 
Francis said that these first 
interim results “show steady 
progress, business continues at 
a satisfactory level, and future 
sales opportunities are plenti- 
ful." 

Sir Francis said that when 
the company was privatised last 
Uay, it received net additional 
capital of £2 77m. At the end 
of the half-year the company 
had a net cash balance of £70m. 

C ommentin g on the volume 
of foreign shareholdings in the 
company. Sir Francis said that 
at over 14 per cent it was now 
very close to the Government’s 
imposed ceiling of 15 per cent, 


dominated, it was thought by 
Japanese purchasers. . 

All shareholders were now 
close to pay?*ig the final instal- 
ment of 85p on their shares 
(by September 23). 

The company was thus 
obliged to inform foreign 
shareholders that if after the 
final instalments had been paid 
the foreign holdings rose 
above the 15 per cent level, 
some would be required to sell 
their shares. 

Rolls-Royce was happy with 
the 15 per cent celling, and had 
not asked, nor would it ask, the 
Government to increase it- 
Earlier this week, British Aero- 


space had indicated that it was 
in the same position with 
foreign holdings touching the 15 
per cent ceiling, and that it 
would like’ td see that ceiling 
raised. 

Commenting on research and 
development spending;. .up by 
£28m to £S4m, Sir Francis said 
this was due partly to increased 
activity on a number of major 
ventures, especially the' RB-211- 
524D4D engine. 

Rolls-Royce is paying an 
interim dividend of L75p in 
early December to shareholders 
registered on November 6. 

Earnings per 20p share were 
8.6p (8.3p) on a nil’ distribution 
basis and 7.0p net basis. 


Revised bid 
document for 
Buckley’s 

By Nikki Tah 

MR PETER CLOWES and Mr 
Guy Cramer — the two directors 
of financial services group, 
James Ferguson, who have 
mounted a £28. lm hostile bid 
for Buckley’s Brewery- 
yesterday published their 
revised offer document and 
claimed that they have a size- 
able expansion programme in 
view for the small Welsh 
brewer. 

To finance the expansion— at 
a possible cost of £10m over 
two years — Mr Cramer said 
yesterday that he envisaged 
acquisitions, first for paper, and 
then perhaps subsequent fund- 
raising via a rights issue. If 
successful, the two men plan 
to retain a controlling stake in 
Buckley’s but place out enough 
shares to retain the listing. 

The new offer document, 
however, was immediately dis- 
missed by Buckley’s as “very 
predictable — it adds nothing 
and is still very lightweight" 
In particular, Buckley's con- 
tinues to express its qualms 
about the financing of the offer 
and the ability /experience of 
the two men in managing a 
brewery. 

Mr Clowes and Mr Cramer 
have taken their stake in 
Buckley’s to around 31.5 per 
cent Yesterday, Mr Cramer said 
he hoped to be back in touch 
with Whitbread which holds 
21.7 per cent; Whitbread 
Investment Trust has a further 
6 per cent 


London United rises to £5.3m 


BY NICK BUNKER 

LONDON United Investments, 
the specialist insurance group, 
achieved a 29 per cent jump in 
first half pre-tax profits to 
£5^3m, after a big increase in 
turnover from £37 .4m to £56.6m. 

The turnover growth was 
partly due to the impact of a 
£24 m rights issue in July 1986. 
which allowed Walbroafc. on- 
don United's underwriting sub- 
sidiary. to take on more busi- 
ness. 

on don United declared an in- 
terim dividend up 15 per cent 
at ?.5p. The shares closed 2p 
down at 763p. 

The group’s operating profits 
for the six months to June 30 
rose from £5 .3m to £7 .3m before 
an unexpectedly high 39 per 
cent increase in overheads from 


£L2m to £1.67m. ondon United 
also had to take £340,000 in 
losses made by associate com- 
panies. 

After-tax profits grew 31 per 
cent to £3 .27m. Earnings per 
share fell from 14.91p to 14.76p, 
because of the greater number 
of shares in issue following the 
July 1986 cash-call 

London United also an- 
nounced that It was making a 
three - for - two capitalisation 
issue of 34&35291 new shares. 

• comment 

little known among investors, 
London United is now a bigger 
name than Lloyd’s among the 
risk managers of the Fortune 
500 US corporations to which it 


supplies excess liability in- 
surance. The interim figures 
rarely do justice to the group, 
because it books most of its 
income in the second half. So 
Us 29 per cent pre-tax profits 
increase was a worthy achieve- 
ment, especially since over- 
heads were boosted by a move 
to new office space and by 
interest cost of a £10m loan 
from Royal Bank of Scotland. 
In the second half, the group 
can look forward to the first 
six months earnings from 
Anglo-American, its under- 
writing joint venture with 
CalFed, a US thrift institution. 
On a forecast full-year pre-tax 
figure of £24m, the shares are 
trading at a prospective p/e of 
11.3: still Cheap. 


Acorn shares plunge on 
interim loss of £1.4m 


BY FIONA THOMPSON 

Acorn Computer shares plunged 
lip to 53p yesterday when the 
company reported an interim 
pre-tax loss of £lJ8m for the 
six months to June 30 1987. 

Mr Brian Long, managing 
director, said the loss was be- 
cause the company bore all the 
production and launch costs of 
its new Archimedes computer 
system during the period with- 
out receiving any revenue from 
the new product, which went 
on sale at the end of June. 

Also, receipts from the 
Master series of microcom- 
puters slipped during the 


second quarter as customers 
waited for the new product 

Acorn, based in Cambridge, 
was rescued by Olivetti after 
a sales slump In 1985 and the 
Italian company has an 80 per 
cent stake. 

The company made a loss in 
tile first half last year of 
£140JH)0 on sales of £19.6m, 
though by year-end it had re- 
turned to profit of £1m on sales 
of £46-6m. Turnover this time 
is £19m. The loss per share is 
2.1p against last time’s loss of 
0.2p. The company is once 
again not paying a dividend. 



Lebowa Platinum Mines 
Limited 

("LEBOWA PLATS") 

(Formerly Atok Platinum Stines (Proprietary) limited) 
Registration number 63/06144/06 

Rustenburg Platinum 
Holdings Limited 

(‘‘RPH") 

Registration number 05/22453/06 
(Both companies incorporated in the Republic oj South 
Africa) 

Proposed rights oiler of shares in Lebowa plats to 
Its members and a renunciation by RPH to members 
of RPH, Lebowa Development Corporation limited 
(“LDC”) and Nationals of Lebowa 

It was announced on 29 July 1987 that an agreement bad been 
finalised in terms of which Lebowa Plats will investigate the 
establishment of a new mining operation on the farm Maandag- 


shook, expandthe mining operations at the Atok mine and seek 
Johannesburg Stock Exchange (“JSE"). In 


a listing on The x „„„ M 

terms of the agreement RPH will transfer 7.5% of the existing 
share capital in Lebowa Plats to the LDC as consideration for 
certain contributions and obligations. 

Subject to the transactions detailed below, the existing shares 
will be converted to another class of shares that will not share 
in the future profits of Lebowa Flats. 

In order to finance the expansion of Atoka mining operatio ns, 
Lebowa Plats will make a righto issue of 86 157 796 ordinary 
shares of one cent each to RPH (92.5%) and the LDC (7.5%) 
at 130 cents per share. This will raise approximately R112xn. 
RPH will renounce at 145 cents per share as set out hereunder, 
its full entitlement to subscribe for shares (93.5% of the total 
issue). The total amount payable by the renouncees is therefore 
275 cents per share. 

RPH will renounce as follows: 

(a) to RPH members 68 926 237 ordinary shares (80% of the 
total issue) by way of a renoun ceabJe letter of allotment on 
the basis of 55 shares for every 100 shares held in RPH; 

(b) to the LDC, 4 307 889 ordinary shares (5% of the total 
issue); and 

(c) to Nationals of Lebowa, Lebowa National Education Trust 
and Lebowa Training Trust 6 461 835 ordinary shares (In 
aggregate, 7.5% of the total issue). 

As a consequence of the above transaction, RPH will realise 
approximately RJ18m as compensation for effectively 
relinquishing its 92.5% ownership of the existing Atok mine. 
It is the intention of RPH to declare a special dividend of 
90 cents per share which represents a major portion of the 
R116BL 

The issue is subject to the JSE granting listings of die 
renounces ble (nil paid) letters of allocation (applicable only to 
the renunciation by RPH to its members) and the ortfinarv 
shares of Lebowa Plats. 

An application will be made to The Stock Exchange; London 
<" SEL ") for listings of the shares (nil paid) (applicable only 
to the renunciation by RPH to its members) and the ordinary 
shares of Lebowa Plats. 

Lebowa Plats shares will not be registered with The Securities 
and Exchange Commission, Washington D.C., or the Securities 
Commission of Canada and accordingly no offer is being made 
to persons with registered addresses in the United States of 
America or Canada. The rights which would otherwise hare 
been allocated to such persons will, if possible, be sold on their 
behalf and the net proceeds will be remitted to them. 

The circular to RPH members, which will include the renounce- 
able (oil paid) letter of allocation, and the Lebowa Plats 
prospectus are being finalised and will, subject to the rules, 
requirements and procedures of the JSE and SEL, be available 
towards the end of October 1987. 

Johannesburg 
10 September 




"Continental - 
Microwave ahead 

All-round growth at Contin- 
ental Microwave (Holdings), 
USM-quoted specialist in micro- 
wave technology, helped taxable 
profits to jump from £963,000 
to £l-26m in the year to June 
30 1987. Turnover moved up 
from £10.98m to £14. 55m. 

The directors proposed a final 
dividend of l-8p, making a total 
of 2.8p for the year. Last time 
Continental paid an adjusted 
final of 1.375p for a total of 
2.25p^ After- higher tax of 
£429.000 (£416,000), earnings 
per 25p ordinary share rose 
from 87p to 12.6p or from 9-2p 
to 12.5p on a fully diluted basis. 

The chairman said that be 
foresaw continued growth 


Holmes and 
Marchant shares 
slip back 25p 

By David Waller 

Shares in Holmes and Mar 1 
chant, the below-the-line mar- 
keting consultant, slumped 
yesterday after the company 
issued a statement saying that 
full-year profits would be less 
than expected. 

It gave three reasons for 
this: the move of two of Its 
divisions to new premises dur- 
ing the second half; invest- 
ment in new computerised 
design equipment; and the 
deferral of expenditure by 
certain clients 

“The initial impact on pro- 
fits in the currant year will, be 
greater than expected " 

The shares fell by 25p to 
415p. and analysts down-, 
graded their full-year forecasts 
from E3A.S22m to about £2.7m. 


Viking Packaging 

Shares in Viking Packaging 
fell 25p to 195p yesterday after 
the company said pretax profits 
this year would be lower than 
those for last because of 
increases in row material costs. 

Viking, which joined the 
m»in market in .January, made 
pre-tax profits of £L27m for the 
year to the end of last Septem- 
ber. Its latest figures, for the 
half year to the end of March, 
showed profits up 25 per cent 
at £576,000. 


Ensign sets 
up new trust 
and calls 
for £47m 

By Nikki Tart 

Ensign Trust, the aggressive 
Investment trust controlled 
by the Merchant Navy Officers 
Pension Fund, is to move its 
£65m portfolio of unquoted 
and development capital in- 
vestments in non-European 
and non-UK companies into a 
new investment trust vehicle. 
It is also ndriwg shareholders 
to put In a further £47m by 
way of a rights issue of the 
new trust's shares. 

The new trust, initially 
worth £112m, will be called 
CDFC Trust, and its shares 
will be listed on the main 
market Ensign boosted its in- 
volvement on the unquoted 
investment side when it 
acquired Commonwealth De- 
velopment Finance Company 
last year; CDFCs investments 
have subsequently been amal- 
gamated with Ensign's, as 
the management team. 

The eleven largest holdings 
will account for two-thirds of 
the portfolio transferred and 
they include, a 6.5 per cent 
stake in Berkley Gove tt, 40 
per cent of Swire Aviation, 
and interests in Transcontin- 
ental Services. CDFC-Berkley 
and the India Fund. 

- In return for the portfolio. 
Ensign will get a 51 per cent 
stake in both the new trust's 
ordinary shares and its 6i per 
cent convertible unsecured 
loan stock. 

The rights issue involves a 
further 49m ordinary shares — 
being offered at 70.Jp, or 85 
per cent of the a ttr i b u ta ble 
net asset value of the trust 
after the rights issue — and 
£14.7m ef loan stock being 
offered at par. The new 
securities are being sold in 
“units”; each one consists of 
10 CDFC Trust shares and £3 
nominal of loan stock. Share- 
holders are entitled to 
1.667975 units for every 100 
ordinary or "B” ordinary 
shares held. 

The major shareholder In 
Ensign is the Merchant Navy 
Officers Pension Fund, with 
about 80 per cent of the 
shares, it will take up Hs 
rights in respect of 60 per 
cent ef its' shares, giving it 
24 per cent .of CDFC The 
balance of tti<» entitlement 
will be placed. 


Investment checks 
Isotron advance 

Iso bran, gamma radiation 
-services, reported a alight 
improvement in pre-tax 
-profits from £L48m to £LS8m 
for the 12 months to June 
30. 

The check to Isotron’s 
advance was due to sub- 
stantial cash investment dire 
Ing the year in the building 
ef the new processing plant 
at Daventry with a resultant 
reduction front £236.809 to 
£121,000 in interest income. 

Turnover rose from £3.l4m 
to. £3 -53m and the operating 
profit from f 1.25m to £L46m. 
Tax of £470,000 (£429,000) 
left earnings per share of 9p 
(8£p). 

A final dividend of L2p 
<lp) makes a total ef L8p 
<L5p>. 


Rowntree lifts interim 
profits by 83% to £38m 


Rowntree, the York-based con- 
fectionery manufacturer, ex- 
ceeded market expectations by 
increasing pre-tax profits by 83 
per cent from £20. 8m to £38. lm 
for the 24 weeks to June 20. 

The directors said that con- 
fectionery profits (without the 
Sunmark US candy business 
acquired last autumn) rose 52 
per cent. 

The most profitable single 
market for Rowntree's products, 
which include snack foods and 
grocery products, continues to 
be the UK which contributed 
trading profit of £2L8m 
(£Z8.5m) but the rate of growth 
was much faster in North 
America where profits almost 
doubled to £15.7m (£8jLm). 

Europe returned a profit of £4xn 
compared with a loss of 
£600,000 for the corresponding 
period last year. 

Earning s per 50p share were 


increased to 13.9 (9.1p) and the 
directors declared an interim 
dividend of 5p (4.4p). 

Turnover for the group 
(formerly Rowntree Mackin- 
tosh) was up by 22 per cent 
to £609 ,2m (£500 .2m), the UK 
contributing £2SL3m (£213.Sm), 
North AmeTica £182.3m 
(£125 .9m), Europe £138m 
(£107.8m) and the rest of 
the world £57. 6m (£53-2m). 

Mr Kenneth Dixon, chairman, 
reid the half-year had been .one 
of the strongest in. the group's 
trading history. 

“ Confectionery performed 
well,'’ he said. •“ There . was 
growth in sales and profits, and 
we achieved satisfactory market 
share increases in the UK and 
elsewhere. 

“In continental Europe the 
strong 1986 performance 
continued with sales volumes 
in the biggest markets, Germany 
and France, 18 per cent and 


10 per cent higher respectively. 
Sunmark, our US candy 
business, made a first-time 
contribution of £9m and has 
fulfilled all our expectations." 

Mr Dixon said that the snack 
food operations on both sides 
of the Atlantic increased sales 
although margins were 
restrained by competition. 
Sun-Pat, the UK grocery 
business, which now - included 
Gale’s honey, continued its 
sales, and profit growth. 

The increase in earnings per 
share reflected an encouraging 
group trading performance, 
which supported the directors 
expectations of good results for 
the full. year. 

Taxation amounted to £8.3m 
(£4ihn) and interest paid was 
slightly lower at £8.5m (£fi.lm). 
Attributable profit came' :to 
£29 Rm (£lBm). 

See Lex 


Oldham’s assets get boost 


BY WILLIAM COCHRANE 

ONLY TWO days after an inde- 
pendent property valuation at 
Oldham Estates took a sizeable 
chunk out of reported assets, 
an up-to-date valuation by the 
company’s own valuers, Bernard 
Thorpe and Partners, has sent 
the figure soaring ahead again. 

The Oldham board committee 
advising shareholders an . the 
MEPC takeover bid for the com- 
pany says that the revaluation 
leaves assets at £654m or 195.4p 
per share, an increase of 32 J 
per cent in ten months over the 
last balance sheet figure of 
147-2p. Two days ago, a revalu- 
ation of Oldham's investment 
properties for the purposes of 
the MEPC bid indicated net 
assets per share of 117p at 
September 30, 1388. 

A note from the commitee’s 
merchant bankers, Schroders, 
explains some of the dis- 
crepancy. The up-to-date asset 


value, it says, includes the 
revaluation of development pro- 
perties; the benefit to Oldham of 
its existing low-cost funding 
arrangement retained earnings 
in the ten months to end-July 
and an increase in the interest" 
held by Oldham in a subsidiary 
not wholly-owned. 

The balance sheet net asset 
value at September 80 1986, it 
adds, included development pro- 
perties at cost, not value, and 
took no account of the benefit 
to Oldham of its low-cost fund- 
iflgarrangement& 

The- committee also says that 
conditions have changed in the 
property, market since last 
September. It says that the 
market has been. buoyant in 
general and rising particularly 
in central London, where a huge 
part of the Oldham portfolio is 
concentrated. 

It describes tile asset value 


resulting from the Debenham 
Tewson and Chinnocks valua- 
tion as “surprisingly Jow," and 
implies that tt is- virtually 
irrelevant, given the amount of 
-- time which has elapsed since- its 
base date. 

It says that it will be writing 
to Oldham shareholders shortly, 
advising them as to whether 
the yshould accept the offer. It 
says that its advice to share- 
holders will be influenced by 
MEPC appearing to have 
secured control of Oldham u on 
terms which are disadvantageous 
to -Oldham shareholders." 

In the City last night, the 
interpretation of this last 
remark is that Mr Hyams will 
still refuse to accept the offer 
for his 30 per cent holding 
which, with. MEPC already own- 
ing 68L9 per cent, represents 
nearly all of the shares out- 
standing. 


Richardsons buys John Holt 


Richardsons Westgarth, engh 
beer and stockholder, is buying 
John. Q Holt, steel stockholder, 
and selling its central heating 
distribution business. Burgess 
Heating Merchants. It has also 
revealed profits op 

from £25,000 to £90j>00 in the 
first half of the year. 

The consideration for Holt 
will be satisfied by the allot- 
ment of up to 5.45m new shares 
in Richardsons -together with a 
payment - of £40,000 'cash. 
Depending on whether' profits 
at Holt for 1987 equal or exceed 
£500,000 the maximum con- 
sideration will amount to about 
£4£m and the minimum to 
£3.8x0. 

Mr David Burnet Richard- 
sons chairman, said: “This is 
the acquisition we have been 
seeking. Holt represents an 
exciting step in the develop- 
ment of Richardsons steel 
stockholding business at a time 
when the- overall business 
environment for steel stock- 
holding is favourable." 

Since tire end of 1984 profits 
at Holt have risen from £137,000 
to £309,000 for the first half 


of 1987. Net assets at fixe end 
of the first half totalled £1 .Often. 

Richardsons has sold Burgess 
to Parkfield Group, an. engi- 
neering and distribution group, 
for a total consideration 
expected to total about £880, 0b0 
in cash. Parkfield has agreed 
to repay Intergroup debt of 
about £300,000 and has also 
assumed bank debt of about 
£600.000. After the disposal 
Richardsons*- consolidated ■ net 
cash, balance will increase By 
about £1.7m. " 

“Burgess is not of an ade- 
quate size on its own, to achieve 
the economies of scale neces- 
sary to show a satisfactory 


performance,” Mr Burnet mid 
Mr Burnet said that Richard 
sons’ improvement was due *< 
a 25 per cent increase in pro 
fits in the steel stockholding 
subsidiaries. ' a reduction oj 
losses in the central heatinf 
and plumbing subsidiary, anc 
tiie replacement of bani 
borrowings . . with cash or 
deposit ..... . . 

In the six months to June K 
/.Richardsons]- turnover fell from 
: £755m to £5. 16m, Earnings pei 
* share, rose- from 0.2p to 0.7p 
Mr Burnet said that the com 
Pany expected to resume the 
Payment of dividends with .s 
final for 1987. 


TODAY 

Allied Insurance- Brokers. 
Aurora. Charles Baynes. Dills, KCA 
Drilling. Sy» tarns Reliability. 

finals: Intornuropo Technology Str- 
ains. Pacific Salsa. 

FUTURE DATES 


- Sept 16 
.. S*pt22 
.. Sept 22 
.... Sept 2* 
— Sept 21 
.... Sept 24 
Sept 17 


BOARD MEETINGS 


Candover .Investments .... 

Chapstow Racecourse 

Christies International 

Clifford's Dairies 

East Lancashire Paper - 

Eva red ............... 

Genan Engineering ... 


Jacob (W. and R.) ......... 

London end Manchester 
Magnolia (Moulding*) ..... 

Marshalls Universal ........ 

McLaughlin end Harvey 

Miss Wo rid ...... 

Httard 

Shires Investment .... .... 

Senior Engineering 

Stag Furniture 

Travis and Arnold 

UOL .. 

Finals— 

Benchmark 

Broadcast Communications . 


Oct 1 
Oct -5 
Sept 15 
Sept 21 
Sept 18 
Sept 16 
Sept 16 
SeprlS 
Sept 29 
Sept 23 
SpprTfi 
Sept IB 

Sept IS 
Sept 18 


© 


KOREA FIRST BANK 

(Incorpanatd »ith Based fia&Sp bt the RrjmbSc oj Korea) 

U.S.$50,000,000 

Hooting Rate Notes Due 1996 

In accordance with the provisions of the Floating 
Bate Note, notice is hereby given as follows: 

Interest Ported : September 11, 1987 to 

March 11, 1988 (182 days) 

Bate of Interest :8 7 Ae% per annum 
Coupon Amount : US$4, 265 £3 

per denomination 
(US$100,000,000) 

Agent 

LTCB Asia Limited 



US $250/100,000 

^CARTERET 
W SRVinGS BAflK 

Collateralized Floating Rate 
Notes Due 1996 

of which U.S. $125,000,000 is being 
issued as the initial Tranche 


PR 


Interest Rats 
interest Period 


8^16% p.t 


11th September 1987 
11th March 1988 

Interest Amount per 

US. SI 00000 Note due 

111h March 1988 US. 34,139.24 

Credit Suisse First Boston Timfari 
Agent Bade 


BANQUE PARIBAS 



U.S. $400,000,000 

Undated Subordinated 
Floating Rate Securities 

In accordance with the mansions of the Securities, notice is 
hereby given that for me interest period 11th September, 
1987 to 11th December, 1987 the Securities wfli cany an 
Interest Rate of 7%% per annum. 

Interest payable value 11th December, 1987 per U.SS1,000 
Security wul amount to U.S.S19.91 said per U.SJBIOJUO 
Security will amount to U.S. $199. 06. 

Morgan Guaranty Trust Company of New York 
. London 
Agent Bank 



NV. Kbninldgte Nederiandsche 
Petroleum MaatschappS 

(Royal Dutch) 

Established at The Hague, The Netherlands 




Interim dividend 1987 


LVMH 


MOET HENNESSY . LOUIS VUITTON 

SHAREHOLDERS APPROVE MERGER 

At held in Paris on September % 1987 shareholders 

of Mo6t Hennessy and Louis V nitron - * ted to approve the 
merger announced by "both companies in June. The company 
te henceforth called LVMH Uo€t' Hennessy Louis Vultton. 
Shareholders also' ratified’ the exchange ratio of one Most 
Hezzaeasy share for 2.4 Louis Vuttton shares. 

To facilitate the exchange of shares, a six-for-five stock split 
will be voted on by the board of directors of LVMH at its 
next meeting on September 16, 1987 If approved: 

Shareholders of Louis Vultton will receive one share 

of LVMH in exchange for two shares of Louis Vuitton; 

Shareholders of Most Hennessy will receive six shares 

of LVMH for five shares of Mp6t Hennessy. - 
The exchange of shares will commence on October 23, 1987 
at which time trading in the new LVMH MoEt Hennessy 
Louis vuitton shares will begin on the Paris Bouse. Until 
that date, the shares of the two companies will continue to 
be quoted separately- 

combined sales of the new company for the seven months 
ended July 81, 1937 reached 6.4 billion French Francs, an 
• Increase of 18.4% over sales for the same period in 1986. 
Most segments ~sre ahead of plan for the year to data 


Board and the Board of Management of 
^°y aJ Dutch Petroleum Company havedecidedtopay an in- 
tonm dividend in respect of the financial year 1987 of 
N.fl. 4.50 per ordinary share with a par value of N.fl.. 70. 

■ 111 ??.” 350 5 t ~ w ® rs ^r certificates with coupons 
this interim dividend will be payable against surrender of 

couponNo.182onorafter22ndSepteir^r. 

ces or. 

N.M. Rothschild 8k Sons Limited, 

New Court, St Swithin's Lane, 

London EC4 P40U 

on business days between the hours of 9.30a.m. and 2 p.m. 

Payment will be made in sterling at the buying rate of n*. 
change current m London at 2 p.m. on 15th Sartember ^ 1987 
m the CTseof coupons presented' on or before tiSt date w 
on foe day of presentation in the case of cmrocwSreSSS 
subsequently. Cbupores must be accompanS 

can 1,8 obtained from n -m- 

such Depositary on 22nd September info qi Jrlf 3 d 

is allowable for a 

lS=r'=aS=E 

Tho Hague. 10th September. 1987. 

THE BOARD OF management 



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Knandal ..Times Friday September 11 1987 

OK COMPANY NEWS 


29 


111 k\' 


Gui 
Peat 

responds to 
Equiticorp 

ByTnry Pwrey . 

Cuirass Feat Group Tester- 
day gave Jtsmeasured response 
to the hostile £338m bid from 
New - Zealand's Equiticorp. 
Forecasting pre-tax. profits of 
£30m for the year to Septem- 
ber, up from the £18m profit 
reported in 1986, OP said the 
210p-share offer ignored the 
real value and prospects of the 
banking and investment group. 

‘"This is an opportunistic 
attempt to seize control of GPG 
on the cheap,” said the UK 
group, Mr Michael Kerr- 
Dineen, managing director, 
said that the forecast had been 
made after pre-tax provisions 
oE £9m for bad debts and 
expected property losses. 

An extraordinary debit of 
£3Jm to cover the closure of 
Guinness Mhhon Singapore and 
the £lm cost of the recently 
abandoned management buy-in 
scheme for the merchant bank 
would .also be made. . 

Equiticorp described - the 
forecast as “ disappointing. ” 
"This is a little below the 
earlier profits’ forecasts of 
many brokers and once the 
Forstmann-Leff acquisition, 
made at the start of this finan- 
cial year, is factored in a more 
valid comparison would to 
£26m not £18m. " . - 

The GPG defence document 
claimed that Equiticorp had 
contributed nothing to the 
group since obtaining two board 
seats and have now been- asked 
to resign, and that the New Zea- 
landers had said nothing about 
their fiiture intentions- 

Expressing surprise at the 
first allegation, Mr Peter Hunt 
of EquiticoTp said that there 
had bee nno board meetings 
that it would have been proper 
for them to attend izi the two 
months since they had won rep- 
resentation. " However, we have 
made one important contribu- 
tion— we saved GPG a lot of 
money by successfully blocking 
the Guinness Mahon deal.” 

With the argument between 
both sides now. centring manily 
on value, one banicing analyst 
commented that “the most 
important thin gis that earnings 
this year are like! yto rise 40 
per cent to 8}p a share.” At 
this level the bid represents a 
multiple of “onhr is times this 
year's earnings," • 


All-round growth helps 
Cookson to £ 69 m midway 


ALL DIVISIONS of Cookson 
Group, which manufactures 
specialist- materials for use in 
industry, contributed to the 
record interim. results announ- 
ced yesterday-' Pre-tax profits 
for the half year to June 30 
advanced'from £43 ra to £68Bm, 
in increase of 60 per cent com- 
pared with the 37 per cent 
improvement from £458-3m to 
£582Am in turnover. 

Mr Zan Butler, chairman, said 
better results were achieved by 
the businesses in the sew 
Cookson Metals & Chemicals 
division, formed recently by the 
merging of the materials and 
the Fry divisions. 

A generally higher level of 
metal prices was favourable 


factor, while farther significant 
progress was made in the litho- 
graphic plate business and use- 
ful contributions were made by 
most of the recent acquisitions 
in that division. 

The chairman concluded that 
the successful rights issue in 
February 1987, as well as help- 
ing to contain interest costs, 
had enabled the group to make 
additional strategic acquisi- 
tions. The latter included the 
remaining 50 per cent of 
Vesuvius, completed at end- 
Jone 1887. and the inter- 
national operations of Plibrico. 
expected to be completed 
shortly, and those should 
further contribute to group 
profitability. 


The group operating profit 
for the period was up from 
£5 15.5m to £73 .5m, of which the 
share of profits of related com- 
panies rose from £28.9m to 
£45. 7m. Interest payable was 
down from £8Am to £4. 7m, tax 
charged was £25.6m (£16m) and 
. minorities £300,000 (same). 
There was a debit of £500,000 
(£2Bm debit) for extraordinary 
items and additional deprecia- 
tion on current values of fixed 
assets of group companies was 
again £2Am. 

Stated earnings per share 
were 28p compared with l&8i>. 
adjusted for the rights issue. 

The interim dividend- is in- 
creased from 2.75p to 4p: last 
year’s total payment was 8.75. 


Pleasurama unveils Earl deal 


BY CLAY HARRS 

PROFIT-LINKED options could 
allow Mr Robert Earl nearly to 
treble his investment in a new 
US company to be set up after 
pleasurama, the casino and 
hotel operator, takes over 
President Entertainments, the 
restaurant group of which he is 
chairman and managing dir- 
ector. 

Based on the formula pub- 
lished in tbe offer document 
for the recommended £63m bid, 
Pleasurama would buy out Mr 
Earl's minority in tbe new com- 
pany for a maximum of £9-5m 
after 1992. (See table). 


To achieve this, the new 
company — which initially will 
hold President’s existing US 
assets, five theme restaurants 
in Orlando, Florida — would 
have to increase pre-tax profits 
by 40 per cent each year until 
1992 (or by that compound 
growth rate over the same 
period). 

This growth rate would allow 
Mr Earl, who will initially 
invest £2m in cash for a 12.5 
per cent stake, to exercise 
options to raise the holding to 
20 per cent (and his total out- 


PROPOSED PROFIT-LINKED SHARE OPTIONS IN 
NEW US COMPANY 

Aimaal % pre-tax 

Robert-EarFs % 

Hb total 

Pleasurama buys 

profit growth 

stain by 1W1 

invcitiKuint 

bis stake for 

2ft 

12A 

£2JDm 

£3.1 4m 

35 

ns 

£2Jhn 

£7.1 8m 

4ft or more 

20 

Q2m 

£9A7m 


Th* figures are illustrative based on President’s expectation that the US 
activities whin show pre-tax profits of about £1m in 1917. Robert Earl 
can exercise options to buy 1 per cent of Newcn from Pleasurma m any 
year In which Newco Increases pre-tax profits Hi dollars by 35 per cent 
(40 per cent growth allows Ms to buy IS per cent). If the growth 
falls short In any year, the relevant options an stiB be exercised if 
compound anna! growth over the 19SS-1992 period readies the target 
figure. The figures assume unchanged dofiar/stariing rates and that 
Mr Earl chose to require Pleasurama to buy Ms shares after 1992, when 
the prices is based on 12 times Ms share of the average of pre-tax profits 
in 1990-92. Earlier exercise is possible on lower multiples of previous 
three-year averages. 


Vickers da Costa bounces back 


BY NUCJCI TA1T ' j V- 

OUT,- but not dowh^^efeetejb 
. Casta may Ixtve -lost its - two 
Investment’ trusts, whose ~-as&4s 
totalled around £I50m, to 
predators earlier this year but 
it is bouncing back with a new 
fund. 

Acorn Investment Trust Is 
being set np via an offer for 


subscription; , and subsequent 
placmgrof up- to 40m*£l shares. 
Vickers will need a minimum 
of £3m before the fond can go 
ahead, and its investment policy 
will be similar to that of the 
two funds which it lost — In- 
vesting in Success, which went 
to Australian-based investment 


DIVIDENDS ANNOUNCED 

2.1 


Allied London Props ... 12 

AB Ports .....int t2A 

Batmah Oil ........ Jnt 6 . 

Campari Int ...int 1A 

Continental Microwave tl-8 

Cookson Group int 14 

Alan Cooper int 

DFCE 

English & Scottish int 
Framlington ............ 

Hepworth Ceramic int 
Home Comities ..Jnt 

Hyman .....inf 

Industrial Finance — 

Isotron ...... — ........ 

John Lafng .....u. ant 2 

Ldn Utd Inv Jnt 73 

MBS ..........int nil 

Moss Bros int 241 

F-E International ...int tl2 

Pifco Holdings 4 

Sirdar t3A 

Rolls-Royce int 1.75 

Rowntree int 5 

Royal Dnteh ........Jnt tt4A0 

Schroders ...........Jnt |6 

Shell Trans int 16A 

Tavener Rutledge hit nil 
Thomson T-Iine ...... **3 

Tyne Tees TV Jnt R7A 

Thomas Walker ...... 0.95 


Jan 7 
Oct 19 

Nov 27 


1A7 

2 

43 

0.5 

1.375* 

2.75 


2B 


1.75 
6t 
14 
3 

225* 

8.75 


1A : 

Oct 23 

— 

. 

1A 

tlA 



132 

2J8t 

IB* 

0A5 . 

— 

0A 


1A5 

9 



6 

14 

9 

+33 

Nov 9 

81 

— 

8-28 

2A 

Nov 2 

1A3* 

— 

5* 

0.75 

Oct 26 

0.75 

_ 

1A 

2 


0A 

3 

1-5 

13 

— 

1' 

IB 

1A 


Oct 30 


Nov 9 
Oct 20 


Jan 4 


Nov 5 


.137* — 

6.5 — 

nil — 

1B5 — 

1 — 

4 6A 

3A 5.15 

4A — 

430 — 


133 

nil 

3.75 

0.78 


1.13 


5.67* 

20 

0.5 

634 

3 

5.76 

5J5 

ISA 
12 A0 
133 
43 
1 

18.75 

035 


vehicle, Panfida, and General 
Funds, -'which was taken over 
by Rn&haugh. 

• "There will be heavy concen- 
tration on Far Eastern invest- 
ments, notably in the smaller 
markets. 

Directors of the new trust 
will comprise Mr Ralph 
Vickers, former chairman of 
General Funds. Mr Roger Nod- 
dings. a principal at Vickers 
and formerly on the board of 
US. and three academics. Pro- 
fessor Robert Neild, Professor 
John Kay and Mr Hashem 
Persareu, of Trinity College, 
Cambridge. 

This time, however, the three 
executive directors — which 
excludes Prof Kay and Mr 
Persareu— also see a perform- 
ance-related bonus scheme: they 
are entitled to one-tenth of any 
excess over 5 per cent by which 
the value of the company’s 
portfolio outperforms the All- 
Share Index. 

If, say, the portfolio beats 
the index by 10 per cent and is 
worth SKhn, they would share 
£250,000. If the performance of 
the company’s portfolio falls 
below that of the index, the gap 
most be recovered before the 
formula operates. 


Dividends shown pence per share net- except where otherwise 
stated. * Equivalent after allowing forecrip issue, t On capital 
increased by rights and/or acquisition issues. tUSM stock. 

fl Third market. |To reduce disparity, 
t FI per share grass. 


5 Unquoted stock. 
•• 16-month period. 


THOMAS WALKER (manufac- 
turer of metal buckles and 
fasteners for the clothing in- 
dustry): Pre-tax profits 

£329,190 (£272333) for the year 
to June 30 1987. Sales £2A0m 
(£2.87m). Final dividend 0.95p 
making total U2p (0.95 p). 
Earnings per share 337p 
(2A8p). 


SEACON HOLDINGS pic 

(lncorporal8dun(}erthBComp8nle3A£iiBK.hto.a^273«) 

TRADING ON THE THIRD MARKET 
Ordinary Share Capital 


In oufrivy shares of 25p each 


Issued and to be 
issued (utypald 
£1,598,653 


AiShorised 
£2^50,000 . 

oSSSSt^K3iiwi2ffi5bocte^ Company became uncon^onalii ^ respects on «h September. 1987. 
The fnued and to be Issued onftiay share capital of Season HokSogspfc is staled on the basis d acceptance# 

MWonl Docks Company. . 

Throuflh Rantekfiartes. Seacon HokJngs pic owns and operates a Heel of spedaBsed cargo yassab. a cargo 
handling terminal indw Port of London anddedoa! Milferd Havnn as wall as haring Interests n road haulage, 
aorage, detrtution and hotels. 

f share 

t inSteshares wB comrowne on l49iSms 

»al business hours hom te Sporeor. 
_ f and a«al» available In the EaelThrd 

Martet Service. 

Seacon 


FtoandaiAtMeonK 
GuUehousa Limited, 

'House, 


London E14HJW 


IEC1A7BA 
11Hi September, 1387 


NeimataSM 

London EC1H 


A7BA 


lay to £3Am). 

Mr Earl will also receive a 
5 per cent gross dividend on 
his original inve stmen t, 
worth £100,000 a year. 

Pleasurama will transfer the 
Florida assets to the new com- 
pany in return for an estimated 
£16m in debt securities. 
Although the headquarters will 
remain in Florida, the company 
may be registered offshore to 
minimise tax. 

The offer document also dis- 
closes that Pleasurama intends 
to provide a total of $90m 
(£55m) in capital investment to 
the US company in the years 
1988-90. 

Pleasuraua’s equity Invest- 
ment would start at £14m. but 
could fall to £12.8m depending 
on how many options Mr Earl 
is allowed to exercise. This is 
almost exactly equal to the 
company’s total pre-tax con- 
tribution to Pleasurama in 
198892 if it achieves 40 per cent 
profits growth each year. 


GEC calls 
off partial 
offer for 
PFPUT 

By Nikki Tait 

GEC Pension Fund yesterday 
abandoned its partial offer for 
51 per cent of Pension Fond 
Property Unit Trust, tbe £223m 
property investment vehicle the 
future of which has been in the 
balance for six months. 

Warburg Securities, which 
attempted to pick up units on 
behalf of the pension fund on 
Wednesday, said last night that 
the offer had not been reopened 
yesterday and was now with- 
drawn. Warburgs had been 
offering £3,l5(h£3i2O0 per unit 

That appeared to be slightly 
below the estimated minimum 
of £3,251 which unit holders are 
being offered following a bid 
by Mountlelgh, tbe fast-growing 
property group, to buy the 
portfolio for £263m. Unit 
holders are due to vote an 
Monday on the Mountlelgh 
deal, which has the backing of 
PFPUTs committee of manage- 
ment 

However, the GEC pension 
fund had argued that its offer 
represented money immedi- 
ately, whereas the Mount! eigh 
deal involved a payout in Octo- 
ber and a very small proportion 
of the total sum delayed even 
after that. 

. Yesterday, however, Moun- 
lelgh undertook to indemnify 
PFPUTs trustees against an 
unexpected (and unlikely) 
overrun on the cost of liquidat- 
ing the fund, thereby allowing 
unxth aiders to receive the bulk 
of the money offered — £3,200 a 
unit— on September 29. Any 
balance over that — previously 
estimated at £51 per unit — 
would then be paid as soon as 
practical 

Yesterday Mr Tony Clegg, 
Mountleigh’s chairman, said he 
believed that the estimate was 
on the conservative side and 
the total payment would ulti- 
mately exceed £3,251. 




INTERIM RESULTS 



Six months 
toaoUidune, 
1987 
COCO'S 

Sbc months 
to 30th June. 
1886 
£000*3 

Year to 
31st December, 
1966 
£000*3 

Turnover 

56,614 

37,407 

105,429 

Operating profit 

7,335 

5,330 

18,654 

Group overheads 

(1,667) 

(1.200) 

(2,409) 

Share of (lossesyprofits of 
associated comjpanies 

(340) 

2 

(406) 

Group profit before taxation and 
extraordinary items 

5,328 

4,132 

15,839 

Taxation 

2,060 

1,656 

5,970 

Group profit after taxation 

3,268 

2,476 

9,869 

Minority interests 

12 

79 

78 


3,256 

2,397 

9,791 

Extraordinary items and transfers 
to reserves 

(8) 

(100) 

(337) 

Profit available for distribution 

3,248 

2,297 

9,454 

Cost of dividends 

1,742 

956 

3.933 

Earnings per share 

14.76p 

14.91 p 

52.03p 

Dividends per share 

7.50p 

6.50p 

20.00p 


The kiterim efividend of 7.5p net per share (1986— 6.5p) wiH be paid on Thursday 15th October, 
1987 to shareholders on the register at the dose of business on Thursday, 24th September, 
1987 

Note* 

1. TharesuBsiutvs boon prepsvd applying Ihaaceoontlng policies observed In respaeioIttwpMranded 31 rt Dacwnbar. 1 966. 

2. Thaabridgad Praflta Loss Account tor tha y«ar andad 31M Dacambar. 1988 is an actactfmm the Group’s tadest puMshed 
Accounts wtuen tiara Men Bad wtiti the Rogfctmr oJ Companies: tte repon of iha Audnotoon thosa accounts was unqualified. 

X Tha tosuftfl lor iha ah month periods to 30th Jim, IWt and 1BBT w anad to. 

Copies ofthe Interim Report may be obtained frvm 
The Secretary, 8S Gracechurch Street, London EC3V0AA. 


Profit before 
taxation . 
^millions. 



1968 


1970 


1972 


1974 


1976 1978 


19SO 


1982 


NS* 


086 


In our 

2i st consecutive year 
were still growing up. 
and up... 



BTRPLC, aLVERTOWN HOUSE, VINCENT SQUARE, LONDON SW1P2PL, TELEPHONE 01- 834 3848. 


- -L. 




30 



Financial Times Friday September 11 1987 





The “Shell” Transport and 
Trading Company, Public 
Limited Company 


Interim dividend 1987 


Notice is hereby given that a balance of the Register 
will be struck on Thursday, 1st October, 1987 for the 
preparation of warrants /or an Interim Dividend for the 
year 1 987 of 1 6-5p per 25p Ordinary Share payable on 
5th November, 19B7. 


For transferees to receive this dividend, their transfers 
must be lodged with the Company's Registrar, Lloyds 
Bank Pic, Registrar's Department, Goring- by-Sea, 
Worthing, West Sussex, BN12 6DA, not later than 3.00 
p.m. on 1st October, 1987. 


SHARE WARRANTS TO BEARER 


The- Coupon to be presented for the above dividend 
will be No. 177 which must be left at Lloyds Bank Pic, 
Registrar’s Department, Issue Section.'l 1 , Bishopsgate, 
London EC2N3LB, at least five dear days for 
examination, ormay be surrendered through MM, Lazard 
Freres, Paris. 


BY ORDER OF THE BOARD 


Shell Centre, 

London, SE1 7NA 
10th September, 1987 


D. W. Chesterman 
Company Secretary 


UK COMPANY NEWS 


Lubricants push Burmah 
to £ 61 m at interim stage 


FURTHER significant increases 
in lubricant volumes contribu- 
ted to a marked increase in 
pre-tax profits at Burmah Oil in 
the six months to June SO 1087. 

Pre-tax profits climbed from 
£37. 6m to £61m, an increase 
of 62 per cent. Lubricants 
and fuels contributed £51 m 
(£36.4m), and all other divi- 
sions moved ahead: speciality 
chemicals improved from £4.4m 
to £6 .9m; LNG Transportation 
was higher, at £6.4m against 
£5. 7m, and energy investments 
was up from £2.9m to £3.7m 
There was a group management 
loss of £3£m (£3. 6m}. 

The directors said that, apart 
from the improved results, the 
group had benefited from 


the continuation of margins 
achieved during the latter part 
of 1986, and contributions from 
acquisitions made during the 
past 18 months. 

Net interest charges were 
substantially reduced — down 
from £8.5m to £4m — but tax 
rose from fl&fim to £27.4m. 
There was an extraordinary 
credit of £500,000 (£16-5m 

debit), which left attributable 
profits £29. 7m higher at £33. 6m. 

The interim dividend is 
hoisted from 45p to 6p net — 
last year's total was 14p from 
pre-tax profits of £105 -9m. 
Stated earnings per £1 share 
were 18.85p (13-24p) before 
extraordinary items 

Group turnover, net of 


duties, was lower at £610.5m 
compared with £ 658.3m, 
Looking ahead, the directors 
said trading conditions re- 
mained favourable and they 
believed 1887 would prove to 
be another successful year. 

They- also reported that 30 
per cent of stockholders elected 
to take advantage of the scrip 
alternative offered in respect of 
the 1986 final dividend. That 
provided major benefits for both 
stockholders and the company, 
and a further scrip alternative 
is being offered. 

The directors are confident 
that the total distribution for 
the year will be greater than 
that paid hi respect of 1986. 

See hex. 


J. Laing rises 10% to £13.2i 


John Laing, construction 
engineer, reported interim pre- 
tax profits up by 10 per cent to 
£13-2m against £12m last time. 
The result was achieved on 
turnover up from £368m to 
£507m, a rise of 38 per cent. 

Directors said they expected 
the full-year results would com- 
pare favourably with last year's 
£38.1m on turnover of £878 m. 
The shares closed 19p Tower at 
360p. 

Earnings per share for the 


first six months of 1987 came 
out at 9.9p (9.5p) and there 
will be an interim dividend of 
2p (L67p adjusted). 

There was a trading surplus 
of £14. 1m (£10.4m) but there 
was a turndown in interest 
charges from net interest 
received of £L6m to £900,000 
payable. The tax charge was 
£4_6m (£4J3m). 

The homes division, directors 
said, continued to benefit from 
its concentration in the south 


east of England, the order book 
for the construction division as 
a whole was satisfactory and the 
newly formed energy, techno- 
logy and environment division 
was achieving its targets. 

Two new nonexecutive direc- 
tors have been appointed. Mr 
Scott' Durward, chief general 
manager of Alliance and Leices- 
ter Building Society and Mr 
Keith Gates, finance director of 
Marks and Spencer. 


comment 



1987 Interim Report 


CHAIRMAN’S COMMENTS . 

Hie Company was floated on.May-20,1987jmd at thfi same r time received net additional 
capital of £277m. At June 13, 1987 the Group had a net cash balance of £70m. 


Results - 

, A continuing high level of activity produced an operating profit of £152m, 28% up on 1986. 
R & D (net) charges of £84m were 50% higher than in 1986 due to both increased activity 
on current projects and reduced launch aid. 

Interest charges for the period were £8m (1986 £10m) and profit before tax of £60m was 
13% up on 1986. 


Prospects 

Business continues at a satisfactory level and sales opportunities are plentiful. 


Dividend 

The directors have declared an interim dividend of 1.75p per ordinary share. This will be 
paid in early December 1987 to those shareholders on the register on November 6, 1987. 

Sir Francis Tombs 


UNAUDITED GROUP PROFIT AND LOSS ACCOUNT 

for the 24 weeks to June 13, 1987 




24 weeks 


24 weeks 


Year to 




to June 13 


to June 14 


December 31 




1587 


1986 


1986 



Notes 

Unaudited 


Unaudited 


Audited 




£m 


£m 


£m 


Turnover 

1 

899 


784 


1.802 


Operating profit 

1 

152 


119 


273 


Research and development (net) 


(84) 


(S6) 


(132) 


Interest payable and similar charges 


(8) 


(10) 


(21) 


Profit before taxation 


60 


53 


120 


Taxation (including 1987 ACT £5m) 


(8) 


I 


1 


Profit after taxation 


52 


54 


121 


Minority interests 


- 


(1) 


(1) 


Profit attributable to shareholders 


52 


S3 


120 


Dividends - Interim proposed 


(14) 






Retained profit 


38 


53 


120 


Earnings per ordinary share 

3 







Nil distribution basis 


&6p 


8Jp 


28.9p 


Net basis (if different) 


7.9p 


- 




NOTES 








1. Turnover 





% 


% 

Civil Aero 


•405 

45 

341 

43 

757 

42 

Military Aero 


367 

41 

313 

40 

740 

41 

Industrial and Marine 


54 

6 

62 

8 

153 

9 

Other activities 


73 

8 

68 

9 

1S2 

8 



899 

100 

784 

100 

1,802 

100 




Hon 





Operating Profit 



Turnover 


Turnover 


Turnover 

Civil Aero 


85 

21 

62 

18 

137 

18 

Military Aero 


58 

16 

50 

16 

118 

16 

Industrial and Marine 


5 

10 

4 

7 

ID 


Other activities 


4 

5 

3 - 

5 

8 

5 



152 

17 

119 

15 

273 

15 


Z The Group produces accounts on a four weekly basis. As income and expenditure do not accrue evenly throughout the year, 
the results for any particular 24 weeks may not be representative of the whole year. 

3. Earnings perordinary share on the netbasis are calculated by dividing the attributable profit by the weighted avenge number 
of ordinary shares - 659 million (1986 63S million) in issue during the period as adjusted for the share consolidation and sub- 
division on Aprii 27, 1987. 

4. The comparative figures for the yearta December 31, 1986 have been abridged from the Group’g accounts for that year; whidt 
received an unqualified auditor’s report and which have been delivered to the Registrar of Companies. 

ROLLS-ROYCE pic, 65 BUCKINGHAM GATE, LONDON SWlE 6AT. 


John Laing’s operating profits 
have been buoyed up once 
again by its strong presence in 
housebuilding in the south east 
of England. But the company 
has had to give some of that 
back because housebuilding, 
while profitable, drains cash and 
thus the £2.5m swing against it 
on interest payment position. 
La lug’s construction side, where 
margins are lower but cash flow 
stronger, has been less active. 
This balance to the company 
gives it a rather sturdy frame. 
Should full year profits reach 
£44m, the shares would be rated 
on a prospective p/e of 11, a 
1.5 point discount to the sector 
that is hard to justify. 


W. C anning 


Allied 
Londonupto 
£5.2mandin 
£40m rights 


Canning increased earnings 
per share from 4Jtp to 10.4© in 
corrects figures in Tuesday's 
the half year to June 27. This 
Financial Times. 


RICARDO CONSULTING En- 
gineers has agreed to dispose 
of G. Cussons. a wholly-owned 
subsidiary, for £L35m In e^slp. 


By William Cochrane 

Allied London Properties, the 
property development, invest- 
ment and housebuilding group 
which bas recorded impres- 
sive eamtnga growth over the 
past five years, added to Its 
record yesterday with taxable 
profits op from £4*05ro to 
£5 .27m for the year to June 
30. It also announced a £40m 
rights issue. , 

It proposes to raise about 
£38 jim net of expenses by 
the issue of 49m new 5} per 
cent convertible cumulative 
redeemable £1 preference 
shares at lOOp a share, to 

ordinary shareholders at the 

rate of one new share for 
every 1.7153 ordinary and to 
convertible loan stockholders 
on the basis of 138.0762 new 
shares for every £100 nominal 
of company stock. 

It says that the issue is 
being made to enlarge its 
investment property portfolio. 
Increase Us development pro- 
gramme and exoand its house- 
btrildine activities. 

The Eagle Star Group owns 
7.79 per cent of the ordinary 
shares and is irrevocably 
committed. Mr Geoffrey Leigh, 
Allied chairman, says, to take 
up its rights in respect of 
3.56m new shares. Certain of 
the directors, who In total 
own or control 49.3 per cent 
of the ordinary, have waived 
their entitlements to 9.11a 
shares which have been placed 
with institutions; their 
entitlements to a farther 
333m shares will be retained 

by thorn initially 

Allied’s letter to share- 
holders also says that the 
total property portfolio has 
been revalued to £UL2m as 
at June 30 last. Indicating 
fully diluted net assets per 
share of U6p against 92p a 
year earlier. 

In order to protect share- 
holders, if- an offer is made 
for the company on or before 
October 31 1993, the conver- 
sion rate will he stepped to 
reflect tile income value 
which is foregone in Rich 
circumstances. 

Income from Investment 
properties rose from £5 .93 m 
to £7.01m. After tax of £1.37m 
(£739,006) earnings per share 
worked through at 7.7p 
(6.59p) undiluted or &23p 
(5JJp) fully diluted. The 
directors proposed a final 
dividend of I.9p (I-S7p> 
making a total of 2Jlp (1.75p) 
for thgjgar. ... 


Sirdar profits hit by 
yarn sales slump 


’ hr' 

w 


* ! 




BY ALICE RAWSTHORN 


Sirdar, the textiles _ 
terday unveiled a sharp fall in- 
pre-tax profits from £ 10.3m to 
£6m is Its last financial year. 
The fall was due to an unex- 
pectedly severe slump in de- 
mand for hand-knitting yams, 
its principal product 

The group is committed to 
diversifying into new areas to 
reduce its reliance on hand- 
knitting yams. Xn the last finan- 
cial year it ha s acquired two 
businesses — Burmatex, a 
manufacturer of carpet tiles, 
and Eversure, which makes 
curtains and cushion covers. 

Mr Jerry Lumb, managing 
director,, said that the group 
intended to make further acqui- 
sitions within the textiles field 
but that it has no specific tar- 
gets at present. 

Sirdar, which is one of the 
largest UK producers of hand- 
knitting yams, has thrived in 
the buoyant market of the past 
12 years. Last year, when the 
market declined worldwide, 
yam sales in the UK fell by 
20 per cent. 

Tlie hand-knitting yam mar- 
ket has began to recover in 
iWest Germany, the US and 
Canada. The group hopes that 
this pattern will be. replicated 
in. the UK, but it predicts that 
It will take up to two years for 
the recovery to be completed. 

Group turnover rose to 
£4&7m (£38.7xn) in the year to 


June SO, but the increase wa 
due to the acquisitions. Yar 
sales fell to £29ifcn (£38.7m) 
Taxation deducted £2J5n 
(£3.7m). Earnings per shar? 
fell to 7 J31p (13.72p). Tin- 
board proposes an un change* 
final dividend of 3J5p, makinj- 
4.65p. 


• comment 

For years Sirdar has beer 
bandied about as a model tex- 
tile company. - Hefty investment 
and heftier, margins have 
turned it into one of the most 
efficient stocks in the sector 
Yet even model companies are 
not immune -to recession. Inves- 
tors could carp that Sirdar 
should have diversified more 
swiftly and should not have 
been taken quite so unawares 
by the severity of the hand- 
knitting slump. But the man- 
agement has been realistic 
about the prospects for re- 
covery. Moreover, it has taken 
1 every reasonable step to miti- 
gate the effects of the slump. 
The acquisitions should contri- 
but £2J>m or so this year, 
taking total profits to Cm 
assuming a modest recovery in 
yams. This puts thfr shares, at 
145p, on a prospective p/e of 
23fr. Fully valued, unless the 
yam market stages a sudden 
revival ... or a predator 
pounces. 




IFICO continues its 
recovery with £1.7m 


BY PHILIP COGGAN 


The Industrial Finance and 
Investment Corporation has 
taken another step on the road 
to recovery after changes in the 
tax system caused a sharp 
decline in its leasing activities. 

Yesterday, It announced pre- 
tax profits up 48 per-cent to 
£1,7 m for the year to June 80, 
compared with an adjusted 
£3,1 5m In the previous year. 
After the rundown in its leas- 
ing business, the company has 
diversified into other areas and 
FUW Holdings, the insurance 
broker which- was acquired 
during the course of the year, 
contributed £L18m to trading 
profits. ' ; 

The estate agency arm con- 
tributed £300,000, and cor- 
porate finance added a further 
£500,000. 

, APA, the, insurance broking' 


arm of Australian investment 
group Unity. Corporation, has a 
44 per cent stake in IFICO and 
Mr Gary Carter and Mr Denis 
Vickery are its representatives 
on the board. 

After tax of £576,000 
(£474,000) and minority 
interests of £11.000 (£2,000), 
earnings per share were 42 per 
cent higher at 6.63p (4.68p). 
The final dividend, which was 
cut last year, is' being set at 2p 
(0.5p), making a total of 3p 
(l-5p). 


!iil? 0 l 


Home Counties Newspaper 
Holdings (printer and publisher 
of local newspapers): Turnover 
£A95m (£&09m) and pre-tax 
profits £L15m (£746,000) for six 
months to July 3 1987. Interim 
dividend 2J5p ,(1.62p adjusted). 
Earnings per share I4.6p 
(18.1P). 


Au3 rim 


■R8BSD Off EOnmucU H&ZtyAPm SNCCorpcoicAd NRwf 




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PROOF THAT HARD WORK GETS NOTICED. 


SmifiNewCoulS record fifls i 


■is even 

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the City. 

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Rilmi^i^tw&at^dedsaieledtyoaeofthe- 
ta^-esttbfishfri teams in London. Furtba;TO 



. ~ EXECm 

biKipess They had us wlffing- anri abfe-f 
outhdrl*^” 1 “ — ' 


Smith new Court 




Hyman 


■3 Broi 













31 


Financial Times Friday September 11 1987 


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UK COMPANY NEWS 


US sale 


helps Hepworth 
up to £ 26 m 


Hepworth Ceramic Holdings, 
the building materials group, 
upped taxable profits from 
£17 .66m to £26.Q6m on turn- 
over ahead' from fl78.25m to 
£181.71xa in the first half of 
3.987. 

The directors declared an 
interim dividend of 3.6p— up 
from S.lp last time — and after 
tax of £9J.5m . <£6.91m), earn- 
ings per share rose from G.7p 
to 9.7p. 

Professor Boland Smith, 
chairman, said that the results 
reflected the .beneficial disposal 
of the' North American busi- 
nesses 1 — Western Plastics and 
W. S. Dickey — as well as the 
successful performance of the 
UK acquisitions. In April 
Hepworth paid 'IT Group £63.5m 
for its domestic appliances 
businesses, which included 
Glow-Worm and Parkray, and 
two months' contributions were' 
included in the figures. 

All the group's traditional 
major businesses showed im- 
proved profitability, with, a 


particularly ! impressive profit 
advance in refractories and 
plastics. 

Professor Smith said that the 
second half had started well 
and' market conditions across 
the group were generally buoy- 
ant He expected the company 
to achieve good profits in the 
second half. 

He paid that it was hoped 
that its £14.1m recommended 
offer for Thomas. Marshall 
(Loxley) would shortly become 
unconditional 

Minority interests accounted 
f or £573,000 (£175,000) and 
there was an extraordinary 
credit of £69,000 (nil). 

• comment 

The revival of British Steel has 
had a marked beneficial impact 
on Hepworth Ceramic, enabling 
refractories' profits to double. 
When the agreed £14m 
Thomas Marshall takeover is 
completed, HC will have the 
dominant national position in 
this sector and be well placed 


to make further gains from 
rationalisation of the £110m. of 
combined turnover. The 
acquisitions from TI already 
look cheap— with the exit 
multiple on the £B3.5m paid 
likely to prove only 10 times 
the eight-month earnings contri- 
bution this year. The £47 Jm 
of goodwill acquired along with 
TI's domestic appliances 
business — primarily the Glow- 
worm central heating boilers i 
and the Parkray solid fuel 
heaters— will disappear thanks 
to merger relief and so will 
not hit the p&l account By . 
the year end Hepworth will j 
have some £180m in share- ; 
holders funds and could be 1 
£40m cash positive — leaving I 
ample room for a circa £i50m 
bid. This year £60tn should be 
achieved, putting the shares at 
264p on a prospective p/e of 
13. The company’s determina- 
tion to move away from its 
traditional clay pipe and in- 
dustrial sand dependency sug- 
gest that the shares could have 
an exciting 1988. 


Tyne Tees 51% up at £2.6m 


Tyne Tees Television Holdings 
which obtained a listing 
in April, reported a 51 per cent 
increase in pre-tax profits, from 
£1.69m to . £?..55m for the half 
year to endJune. 

The directors, have lifted the 
interim dividend to 7.5p (3.75p) 
to reduce the disparity between 
the interim and' final payments. 
A total of 18.75p was paid in 
1986 when taxable profits 
amounted to £421 m. 

Sir Ralph Carr-Ellison, chair- 
man ; said the increased turn- 
over, up by 13 per cent to 
£26-39m (£23 29m), neglected 


a real growth in both advertis- 
ing revenue and programme 
sales. He added that it was 
particularly satisfying that cost 
increases had been rigorously 
contained and held within 
levels of inflation. 

TV advertising revenue had 
remained strong throughout 
the period, the chairman re- 
ported, ’and the company 
had been able to sustain a 
market share of nearly 4 per 
cent of network total. Recent 
marketing initiatives, par- 
ticularly Pulsebeat and Finan- 
cial Pulsebeat, designed to 
Stimulate .new advertising in 


the region, had produced en- 
couraging results. 

The second half had started 
well, he concluded. 

From a gross profit up from 
£S-59m to £72 5m. the Channel 
4 subscription took slightly 
more at £4.05m (£4.-16m) but the 
Exchequer levy was substan- 
tially higher . at • £1.08m 
(£100,000). There was also an 
interest credit - of £325,000 
(£357,000). 

Tax amounted to £984,000 
(£685,000) and there was an 
extraordinary £41i000 charge re- 
lating to the costs of the listing, 
net of Exchequer levy. 


Schroders ahead at six months 


BY DAVID LASCELLE5, BANKING EDITOR 


Schroders, the UK -merchant 
banking group, reported yester- 
day that profits, for the first six 
months of this year were 
higher than in the same period 
last year. • 

The group is one of the few 
which does, not give any' details 
at tiie interim stage. However, 
Mr George Mallin ckrodt, the 
chairman, said that this practice 
might haye_io.be r*yfexed._.«. 


He said that the performance 
of the group was satisfactory, 
including the half share which 
it has in Wertheim, the Wall 
Street investment bank! Despite 
some personnel problems, the 
securities business was per- 
forming close to budget In 
Tokyo, Schroders is now' hoping 
to obtain stock exchange mem- 
bership next year. 

. Mr Mallinckrodt said that the 
results showed- that last year's 

’ . T * _ |_ -U' - * i » • 


reorganisation, which included 
the sale of various non-essential 
businesses, was “bearing fruit” 
in higher quality earnings and 
more efficient use of capital. 

. .The . group Is paying an 
interim dividend of 0p per 
' share. This is double last year’s, 
but the increase reflects 
Schroders’ wish to cut the dis- 
parity between the interim and 
final dividend and is not a i 
change in dividend policy. 


Hyman rises and makes cash call 


A COMBINATION of internal 
expansion and external acquisi- 
tion, enabled Hyman,. Oldham* 
based polyurethane foam con- 
vertor- and manufacturer, to 
achieve a record peformanee in 
the six months to June 30 3987. 

Pre-tax profits rose from 
£873,000 to £952,000, and this 
included a contribution of 
£84,025 from the joint venture 
company, Folytex Holdings, 
which, the directors said, had 
performed encouragingly in the 
first tix months of its trading. 

The board added that it bad- 
every confidence that the. group, 
would maintain jhe current 
progress and anticipated recom- 
mending a final dividend of 


0£5p per ordinary stock unit 
for the full year. This would 
be paid on the increased called 
lip capital. In the ■ meantime, 
the interim dividend' is .un- 
changed at 0.75p net 

The group is offering by way 
of rights, 9,998,882 new ordinary 
stock units at 40p per stock 
unit. The baas is one new 
ordinary for every three exist- 
ing ordinary. The issue will 
raise approximately £3 2m after, 
expenses and has been under- 
written. 

The rights issue proceeds will 
reduce bank borrowings and 
provide resources for additional 
capital expenditure, and for 
funding further acquisitions. 

The company is to continue 


its considerable investment in 
development of improved fire 
retardant foams, such as Mela- 
tex and FireseaL 

Turnover for the opening half 
was down from . £17 2m to 
£16.5 8m. The .pre-tax figure was 
after interest charges down from 
£304,000 to £276,000. Tax took 
£333,000 against £295,000. Stated 
earnings per stock unit im- 
proved from 1.93p to Z08p. 

Automagic Holdings 

Figures for Automagic Hold- 
ings published in the Financial 
Times on September 2 were for 
the 52 weeks ' to May 2, 1987, 
and not for the half year as 
stated in the headline. 


Moss Bros advances to £0.48 bq 


Alan Cooper 


Improved retail demand and 
the first effects of the changed 
approach by the management 
were reflected in a 36.5 per cent 
improvement from. £348,000 to 
£475,000 in pre-tax profits of 
Moss Bros, retailer, and hirer 
of clothing ancillary goods, for 
the six months to August 1. 

Mr Wilfred Cass, chairman, 
said however that there should 


be some caution In drawing con- 
clusions from the interim re- 
sults that the year-end results 
would reflect a similar level of 
improvement. 

Turnover for the period rose 
202 per cent from £9 2m to 
£11- 9m. 

Earnings per share rose to 
9.72p <7.15p) and the interim 
dividend is being lifted to from 
l-85p to 2L3p. 


Alan- Cooper Holdings, office 
! furniture manufacturer which 
obtained a full listing in April, 
achieved pre-tax profits of 
1 £976,000 in the six months to 
June 30 compared with £727,000 
previously. Turnover increased 
from £S.16m to £4. 37m. 

Earnings rose to 62Sp 
(4J5p). Interim dividend . is 
same-again L5p. 


This notice is issued in compliance with the xeqttirementa of the Council of The Stock 
Exchange. It does not coosnmtB an invitation to the public to subscribe ibr at 
. . . purchase any securities. 

AlKed London PrppertiesPlc 

(Registered in England) 

Rights Issue of 40,000,000 new 5% tier cent 
__ Convertible Cumulative Redeemable Preference Shares 
of £1 each at lOOp per share . 


Particnlan dr the dams will be araflohle in the Excel Katisrical service and coplesof die Listing Ratkulaomaybeobtaired 
during u aia l business hours up to and including 15 th September 1987 fnmi die Company Announcements Office qf . 
TheScock Exchange wrul up u ami touted ing 25dh. September, 1987 fiom: 

Allied London Properties Pic, 

Allied House, 

26 Manchester Square, 

London W1M 6EU 


Oil price rise helps 
Tricentrol to cut its 
losses at midway 


ThxafaruscmeBt cob fiiaxe with ibe ittfutoxan of ibe Council of The Stock Ftrhtn ge. kdeu use 

emobneoa fartedno a thepuUx u w&xrib^r «/nrdK»*y*en»MB. 



THE increase In oil prices 
although tempered by the 
weakness of the dollar against 
sterling was largely responsible 
for the improved performance 
by Tricentrol, the independent 
oil company, iu the first half 
of 1987 compared with the 
equivalent period last year. 

On turnover down from 
£18.1m at 117.2m, losses before 
tax fell from £3 .8m to £2.1m. 
Losses for the second quarter 
alone fell from £4.1m. to £l.lm. 
The loss per share fell from 
2.5p to 1.9p for the first six 
months and from 3J3p to lp for 
the second quarter. 

Comparative figures have been 
restated to eliminate the discon- 
tinued North American activi- 
ties — in November Tricentrol 
agreed to sell three-quarters of 
its assets in the US to a group 
of Institutional Investors in a 
deal worth £60 .3m — and 
adjusted to reflect the 
company's change in accounting 
estimate for 1986 and decom- 
missioning at the end of that 
year. 

Production costs fell from 
£8.7m to £5 ,2m and depletion 
and decommissioning expenses 
totalled £7.1m (£7.7m). Admini- 
stration costs amounted to 
£500,000 (£400.000) while other 
operating income totalled 
£300.000 (£ 100.000 loss). 

Mr James Longcroft, chair- 
man, said that the development 
of Amethyst and North Raven- 
spurn was proceeding satis- 
factorily while the award of 
final “Annex B" approval for 
the Wytch Farm on-shqre oil 
field had added certainty to this 
development which would be of 
great benefit 

He said that discussions were 
proceeding with financial insti- 
tutions to secure adequate funds 
for development of the com- 
pany’s gas fields in the 


Southern Gas Basin of the 
North Sea and to refinance the 
existing Wytch Farm credit 
facility. 

Exploration activity, although 
reduced, was continuing satis- 
factorily. Prospective acreage 
was being maintained, bearing 
in mind the need to have an 
adequate acreage base to lake 
advantage of the expected up- i 
turn within the oil industry. 

f comment 

When James Longcroft, Tri- 

centrol's mercurial chairman, 
announced in July that he was 
personally taking charge of the 
search for £350ra of long-term 
borrowing to fund and refinance 
the company's development pro- 
gramme, the balance of City 
opinion over the prospects of 
such a package being in place 
by December moved from 
sceptical to neutral. Unlike 
their UK brothers, American 
banks are apparently keen (or 
have shorter memories?) to lead 
off a “fairly unusual" mix of 
10-year dollar borrowing and a 
sterling overdraft facility. A 
non-bank component might also 
provide an intriguing subject 
for column writers when and 
if the scheme is finalised. The 
high risk approach will send 
gearing sky high — 500 per cent 
or so — and see no serious 
change in the meagre cash flow 
position until the turn of the 
decade. However, all the pro- 
mising acreage will be kept 
intact. A middle way could see 
a sale of an asset and or a rights 
issue near the year-end once 
the borrowing deal is as good as 
bankable. A worse case scenario 
Is the progressive selling off of 
assets — which in today's market 
should easily provide cover for 
the shares at I18p. A good 
speculative buy. 


CDFC Trust PLC 

Incorporated in Scotland No. 1 06024 under the Companies Act 1985 

Introduction to The Stock Exchange 

and 

Rights Offer to shareholders of Ensign Trust PLC of Units 
comprising a total of 49,000,000 new ordinary shares of 
lOp each at 70. 3p per share and £14,700,000 6Vi per cent. 
Convertible Unsecured Loan Stock 2010 at par 

Issued and 

Authorised fully paid 

£l 5,000,000 ordinary shares of lOp each £10,000,000 


ordinary shares of lOp each 


CDFC Trust PLC (“CDFC Trust"; i, a mm- ccropjny estabtohed to apeentee in dcvdopmgw capital 
investment outside the UK ind Europe. Tbe main investment objective of CDFC Trust will be to 
achieve long-term capital growth. It b intended that the affairs of CDFC Trust will be conducted lu 
sueba wa v tint it should <puZilr far sppraral as on tm-esanmr trust tar tat purposes. 

Ap p li ca tio n has been nude to die Council of The Stock Exchange for the Units, die ordinary shares of 
lOp each and the 6W per cent. Convertible Unsecured Loan Stock 2010 of CDFCTmst to be admitted 
to the Official Last It is expected dut dealings will commence, nil paid, in the Units of ordinary shares 
and Convertible Unsecured Loon Stock on Thursdav, 1 7th September. 1987. 

The Listing Particular* refacing to CDFCTiust are available fa the Extd Statistical Services and may be 
obtained during usual business hours up to and including 15th September, 1 987 from The Ctxnpwy 
Announcements Office. The Stock Exchange. Throgmorton Street, London EC2 and on any weekday 
(Saturdays and bank holidays exceptedj up in and including 7tfa October, 1987 from the registered 
office of CDFC Trust, One Charlotte Square, Edinburgh ETU 4DZ and from. — 


Morgan Grenfell & Co. Limited 
New Issue Department 
72 London Wall 
London EC2M SNL 


de Zoete & Sevan Limited 
Ebbgate House 
2 Swan Lane 
London EC4R3TS 


Bank of Scotland 
New Issues Department 
Apex House 
9 Haddington Place 
Edinburgh EH74AL 


J September, 198 7 


INTERIM RESULTS TO 30 JUNE 1987 



STRONG FIRST HALF 
PERFORMANCE 


• Profit up 62 per cent 

Continuing volume and profit growth in Castrol 
• Speciality Chemicals profit up 57 per cent 
• Earnings per share up 42 per cent 


First Half First Half 
1987 1986 

£m £m 


Profit before tax 


Profit after tax 


Earnings per stock unit 


33.6 


18.85p 


37.6 


20.7 


13.24p 


The interim dividend was increased from 4.5p to 6.0p. This will be paid on 7 January 
1988 to stockholders on the register at 30 October 1987. The board is confident that 
the total distribution for the year will be greater than that paid in respect of 1 986. 


Cartoem &. C&, , 
12 Tokenhouse "find, 
London EC2R 7AM 


J. Hetuy Schroder "Wagg &. Co. Limited, 

120 Cheapside, * 

London EC3V6DS ... 

■. Emmuxc Gotooti & Co. Limited, 
'9 Moorfields Hlghwslk, 
London EC2Y9DS ■ 


Lloyds. BankPlcj •' 
Regisnar'i Depanmehii 


Worthing, West Sussex BN126DA 


llrh Septemba; 1967 


IN GREAT SHAPE FOR GROWTH 


The Burmah Oil pic, Burmah Ho.use, Pipers Way Swindon, Wilts. SN3 1 RE 







32 


Financial Times Friday September 11 1987 



Schroders 


Interim Statement 

lOth September, 1987 

The Directors of Schroders Public limited Company 


have resolved to pay an interim davidendf or theyear ending 
3 1st December, 1987 of 6p per share (1986 ^P) 

on the Ordinary Shares of £1 each (fallv naid) and on the 
non-voting Ordinary Shares of £1 each 


[fully paid) _ 
uch (fully paid). The 


TSurt of the Dm*Aor*’ intention as 
stated in the Chairman’s Statement issued with the 
accounts in April last to reduce the disparity m size between 
the interim and final dividends. It does not imply an 
increase in the total sum to be distributed by way of dividend 
in respect of 1987. 

The dividend will be payable on 29th October, 1987 to 
shareholders whose names appear in the Register of Members 
of the Company as at 1st October, 1987. 

The profits of the Schroder Group for the first six months 
of 1987 were higher than in the same period of the previous 
year. 

120 Cheaps ide 
LONDON 
EC2V 6DS 


r 



London 

Merchant 

Securities 


IMS pic 


Highlights of the y ear 

1987 

£000 

1986 

£000 

Profit before tax 

16,842 

17,211 

Profit attributable to 
shareholders 

8,289 

7.719 

Shareholders 1 funds 

183,494 

167,392 

Earnings per Ordinary share 

5.55p 

4.83p 

Dividends per Ordinary share 

2.80p 

2.55p 


The combination of high quality property-based income and assets* 
excellent liquidity and low gearing which the group enjoys provides a 
firm foundation for further rewarding expansion. 

Report and Accounts available from the Secretary, (after 15 Sept) 

Carlton House, 33 Robert Adam Street, London W1M5AH. 


COMPANY 

Steye Butler on the alternate proposals for a struggling paper mill 

The battle for Olives’ future 


IMAGING, if you can, a strug- 
gling company In which shares 
are trading at between ISOp and 
200 p, and where the board 
rejects a £3m, 100p per new 
isued share, capital inpection 
proposal in favour of one at 
85p per share that would put 
in only £3.74m. 

Ton needn’t It — this 

is Olives Paper Mills, where 
share holders will today vote to 
approve or reject the board- 
endorsed proposal through 
which Michael Kent would put 
£3-74m into the company, be- 
come Its majority shareholder 
and chairmanship of 

the company. 

Mr Kent, however, is not con- 
vinced that he will end up as 
chairman of Olives even though 
he can already put about 20 per 
cent of the vote in his pocket. 

The obstacle in his path is the 
alternate proposal by Mr Nathu 
Puri and his company, Melton 
Medes, that if eventually adop- 
ted would overnight boost the 
asset backing of every share of 
Olives Paper above that of the 
Mr Kent's proposal. 

“This is really a high offer 
that is very difficult to refuse," 
Mr Kent says. “Institutions 
take a hard financial view; they 
have to." 

Indeed, Mr Kent goes a bit 
farther than this. 


“I think he is paying a fan- 
tastic price for it. I don’t know 
if it speaks well for his business 
judgment," he says. 

Olives is the oldest indepen- 
dent paper mill in the UK and 
produces wood-free paper. Its 
financial performance has been 
extremely dull in recent years, 
with no dividend since 1988, 
and it has come under hank 
pressure to reduce working 
capital overdrafts. 

Olives desperately needs an 
Injection of capital to reduce 
borrowing and to invest in new 
equipment 

Both the Kent and the Puri 
proposals would provide tins, 
hut aside from the financial 
differences in the proposals, 
Olives’ shareholders today are 
choosing who is going to run 
the company. 

Mr Kent has the advantage 
that he gets on with the cur- 
rent Olives board and has the 
endorsement of management 
and the company’s unions. 
There would be no suddent dis- 
ruption in the company should 
he take control. 

Mr Kent admits be has no 
expertise in the paper business, 
but he does know about pro- 
perty development and has 
some plans for the 70-acre 
Lancashir e site where Olives is 
located. 



Melton Medes has made some 
hay over the decline in turn- 
over and pretax profits in Mr 
Kent’s listed property company. 
M. P. Kent, before it was taken 
over by G. H. Beazer in 1981, 
implying that there are 
questions about bow successful 
a businessman Mr Kent has 
been. 

Mr Kent says, however, that 
the decline reflected a 3982 
board decision to sit on pro- 
perties, including valuable sites 


in the City of London, and that 
this decision has been proved 
correct by the subsequent fan- 
tastic appreciation of property 
values. , „ _ 

In the 10 years of K. 
Kents public trading, share- 
holders* funds rose eachyear 
from 7 Jp per share in 1975 to 
53p in 1984. ■ 

Mr Puri, by contrast; has 
experience in the paper in- 
dustry, and can boast a rather 
impressive record for Ms own 
private companies from pre-tax 
profits of £505,000 on turnover 
of £i7.7m in 1985, to estimated 
1987 profits of more than GL5m 
on a turnover of £08- 6m. Olives 
would become a _ vehicle for 
acquisition and diversification. 

The hurdle he must over- 
come. however, is friction with 
the Olives board and manage- 
ment and suspicion from Olives 
unirwre- Mr Puri challenged and 
embarrassed the board over 
“golden parachute” directors’ 
contracts earlier this year, and 
the board has since resented 
his approaches to the company. 

The Olives board’s distrust 
and of Mr Puri is under- 

standable given t he un certainty 
over their own future should 
be win control of Olives. But 
if Olives* shareholders today 
reject the Kent proposals and 
turn against their board, these 
are feelings file board will have 
to swallow. 


P-E International 
advances to £L3m 

AFTER announcing first half 
taxable profits up from £L01m 
to £134m, Mr Hugh Lang, 
*»>miiTnan of P-E International, 
consulting services group, said 
that the company was on course 
for another successful year. 

Turnover moved up from 
£ 11 atm to £13B7m. The direc- 
tors declared an interim divi- 
dend of 1 jp — up from lp — 
and earning s per share emer- 
ged up from 5flp at &8p after 
higher tax charges of £498,000 
(£894,000). Last time’s extra- 
ordinary credit of £290,000 was 
not repeated. 

In early June P-E completed 
the acquisition of Inha con, 
management consultants, which 
contributed £751,000 to turn- 
over and £66,000 to profits. 


MEMOS? COMPUTER Dublin- 
based computer manufacturer 
and di st r i but o r: Pretax profits 
44 per cent ahead at H510.000 
(£550,000) far year to June SO. 
Fully diluted pnming s per 
share L5p (0-84p). 


Haggas up 33% and expanding 


BY ALICE RAWSTHORN 

John Haggas, Yorkshire-based 
wool textile group, yesterday 
announced a 33 per cent 
increase in pretax profits to 
£4m last year, despite static 
turnover. It is also close to 
concluding negotiations to 
acquire a company with 
interests related to wool 
textiles. 

Its shares rose by 6p to 212p 
n the announcement 

Haggas returned to the stock 
market last year with the 
express intention of expanding 
through acquisition. Its attempt 
to acquire Bulmer & Lamb, a 
weaving and kmtting company, 
foundered in July last year. If 
the present negotiations prove 
successful, the acquisition will 
he its first since the return fa 
public quotation. 

In the year to June 30, group 


turnover was static at £25£m 
(£28m). Mr Brian Haggas. 
chairman and chief executive, 
attributed this to the fact that 
the spinning and fabric busi- 
nesses ran a full capacity 
throughout the year. Both 
businesses increased profits, to 
£&2m (£2:7m) and £542,900 
(£351,000) respectively, because 
of improvements in quality and 
productivity. 

The group paid £2.4m (flJn) 
in taretMm during tiie year. 
Fuming; per share rose to 13p 
(lOp) and tiie board proposed 
a final dividend of 2p making 

sp- 

Haggars recently bought a 
block of land next to its spin- 
ning mill to build a new fac- 
tory which will increase its 
yam capacity by 15 per cent. 


Building 

months. 


will begin in two 


The group is also =■ doubling 
the capaicty at Aire worth, the 
spinning company acquired be- 
fore the flotation. Aireworth’s 
sales fall last year because 'of 
reorganisation, but profits rose 
to £192400 <£178,000). 

The trouser company sus- 
tained a fall in both sales and 
profits; the latter slipped . to 
£22.000 (£72,000). Us Haggas 
said that, unless its perform- 
ance improved within the next 
two months, he would consider 
closing the business. 

Mr Wagfpwc expressed his 
optimism about the group’s 
prospects far tbe present year. 


HEPWORTH 

CERAMIC HOLDINGS PLC 

RECORD INTERIM PROFITS 


Profit before tax up 47.5% 

Earnings per share up 44.8% 

Dividend up 16.1% 

The implementation of the new management’s strategy over the last 
year has resulted in greatly Increased profits for the original divisions. In 
addition the new heating division has been successfully integrated into 
the group. 

Professor Roland Smith's chairman’s statement highlighted: 

★ Profit improvements in all the group’s traditional major businesses, 
with GR-Stein performing exceptionally and new management 
producing a major tumround at Hepworth Plastics. 

★ £1.8m benefit to profit from acquisitions and disposals including only 
two months’ profits from the new heating division, comprising brand 
leaders Glow-worm and Rarkray. 

★ The acquisition of Thomas Marshall (Loxley) RL.C will further 
strengthen GR-Stein’s market position. 

★ An encouraging start to the second half/ 


SUMMARY OF RESULTS 



Six months to 
30th June *87 
£m 

Six months to 
30th June ‘86 
£m 

Year ended 
31st Dec *86 
£m 

Turnover 

181.7 

178.3 

362.4 

Profit before tax 

26.1 

17.7 

41.0 

Profit after tax 

16.9 

10.7 

27.5 

Earnings per share 

9.70p 

6.70p 

17.19p 

Interim dividend 

3.60p 

■ 3.10p 

8.28p 


ttve . computer . maintenance- 
t~ company, revealed' to The CSfy 
yesterday that Its profits far 
1986-87 had risen to £5.37m 
pre-tax, an improvement of 
36 per cent over the previous 
year’s £3.95m. 

Furthermore, the directors 
said that with strengthened 
international management and 
a high level of new mainten- 
ance contracts won last year 
DPGE was well positioned for 
continued growth in tbe year 
ahead. 

Turnover for the past year. 


DPCE fops £5m and sees 
furthergrowtii ahead 

" DPCE" Holdings^ the acquis- *fa ehd-June, 'advanced from 


£28.59m_to £40 jOhn.. Interest 
income amounted to "£661,000 
(£816,000), tax to £1.79m 
(£L65m) and minorities to 
£236.000 (£106,000). 

Earnings emerged at lLlp 
(7 -Bp). A final dividend of 
l-6p raises the total from an 
adjusted L77p to 2J8p net on 
the enlarged share capital. 

Figures for 1S8&86 have been 
adjusted to include those of US 
compute r company Syste c 
which was acquired last Decem- 
ber. DPCE raised £14j6m in 
April to fund further acquisi- 
tions. 


unwanted bid .from Thornton 
•Pacific Inves tmen t -Fund -with 
its own reorganisation pro- 
posals — added 2p yesterday to 
185p. 

This fallowed an announce- 
ment from Lloyds Bank (SF) 
Nominees that it had purchased 
another 100,000 shares, taking 
tiie total holding to 15m shares 
or 5.09 per cent. 

There have been suggestions 
that other TR trusts might, 
follow the Pacific Basin fund's 
example, although Touche Rem- 
nant itself says this is a matter' 
for the individual boards. 


TR Australia 

SHARES IN TR Australia, one 
of the sister investment trusts 

1 1? 81 * receati y tor £2 05m— more 
defendu « compMr origiMHy 


AB Ports 
improves 
by 21% 
to £13.3m 

A 21 PER CENT increase in 
pre-tax profits far the half-year 
to June. SO . and the forecast of 
a significant improvement in 
profits far the fall year com-, 
pared with 1986 was anounced 
yesterday by Associated. British 
Ports Ho ldi ng s. 

First-half profits were £L35m 
against film and compared 
with a 7.5 per cent improve- 
meat from £7JL5m to £79m in 
the turnover of port services. 

Sir Keith Stuart, chairman, 
said that port services — the 
group . operates 19 ports 
throughout England, Wales and 
Scotland — should continue to 
make useful progress as the 
effects of cost reductions, came 
through. ~ - — 

Property profits would benefit 
from the recent successful sale 
of Grosvenor Square’s property 
in Bishopsgate for £20-5m and 
from a range of schemes under 
way. Comparable figures for 
1986 did not include results for 
Grosvenor Square Properties, 
acquired in January 1987. 

At the Humber ports. Sir 
Keith said, business continued 
to expand. At Hud. a new pas-, 
senger and freight terminal had 
been opened to service -North 
Sea Ferries’ new vessels. At 
imwitrigham, work has begun on 
a schemes to extend berthing 
fatalities in the enclosed dock 
which will increase the port's 
general user capacity by some 
20 per cent 

Operating profit of the port 
service^ increased from £6.2m 
to £9.4m after deducting volun- 
tary severance of £3JBm 
(£2.7m). Property income rose 
to £4.7m (£3 5m) and invest- 
ment Income to £Um (£05m). 
Interest payable amounted to 
£L9m (£L2m) and tax to 
£4.4m (£$.6m) leaving stated 
earnings per share of 105p 
(9.1P). v 

The interim dividend is 
raised from 2p to 2.5p per 25p 
ordinary. 

• comment 

This looks like being the year 
when property could move up 
to take equal profits Wiling 
with ports. Boflh sides are 
showing growth but the 
property side is steaming 
ahead at a faster rate of knots. 
Yesterday's figures were the 
•first to include a contribution 
from Grosvenor Square Proper- 
ties, acquired in January this 
year, but its real impact will 
be fait in the second half with 
the inclusion of • sales such as 
the Bishopsgate properly which 


paid- fat GSP*: -Thp acquisition 
of GSP was a necessary move 
bringing with it not just a nice 
portfolio of land ana projects 
but in-house expertise to 
address the company’s develop- 
ment of its 2500-8500 acres of 
surplus pout land. The 19 ports 
themselves remain a sohd busi- 
ness, the east coast ports par- 
ticularly well placed to benefit 
from increased EC trade. 
Shares closed 7p down yester- 
day at 592p. Assuming pre-tax 
mid pre-severance payments 
profits of £43m this year, that 
puts them on an attractive pros- 
pective p/e of about 17. 


MBS continues recovay 


MBS, formerly Micro Busi- 
ness Systems, has continued tiie 
recovery seen in tiie second half 
of 1986 and far the six months 
to June 30 reported pretax pro- 
fits of £755,000 against a loss of 
£L28m. 

The company, which distri- 
butes. maintains and provides 
training in tiie use of mini - 
computers and associated pro- 
ducts, improved turnover by 24 
per cent to £4551 m (£3&8m>. 

A period of restructuring has 
been embarked upon and in 
view of tbe costs involved and 
the continuing cash require- 
ments of a growing business 
the directors consider it 


inappropriate to declare an 
interim dividend. Earnings far 
tiie period came out at 0-9p 
(S.2p losses restated) per 5p 
share. 

In August MBS acquired 
Combro, and although not 
m ak ing a contribution this 
time, its pre-tax profit for the 
period exceeded £500,000. Those 
benefits would come through in 
tiie year-end figures, directors 
said. 

The May rights and subscrip- 
tion issues raised about £10m 
which helped to reduce interest 
charges significantly. They fell 
from £1.4m to £848,000. 

Tax took £220,000 (nil). 


Corton Beach profit surge 


BY PHRJP COGGAN 

. Corton Beach, the Third 
Market mini - conglomerate, 
yesterday announced quadru- 
pled interim pre-tax profits and 
an 153 per cent increase in 
earnings per share. 

Tbe group’s three divisions — 
food, automotive and leisure- 
are all trading profitably with 
leisure currently the biggest 
earner but Mr Mike Keen, the 
Chairman, said that tiie long- 
term aim was to achieve 
roughly equal profits from each 
division. 

Freer erite Food Centres was 
acquired after the end of tiie 
first half and makes no contri- 
bution to these figures. 


Propeller, the textiles sub- 
sidiary acquired as part of the 
fully-listed Tern last year, will 
be floated on tbe Third Market 
in the autumn. Analysts expect 
that the group will be valued 
at around £6m. 

Trading profit in the 26 
weeks to August 1 was £152m 
(£281,000) on turnover of 
£20 5m (£7 .6 m) and after 
Interest payable Of £212500 
(£79,000), pretax profits were 
£806,000 (£202,000). 

Earnings per share were 2£p 
(1.12p). Although the group is 
not paying an interim dividend, 
it intends to recommend a final. 


Campari recovery continues 


Camp ari International, im- 

S rter and distributor of 
sure, camping . and boating 
equipment, continued its re- 
covery and raised prefax profite 
to £524,000 far tbe six months 
muling May 31 compared with a 
£95,000 loss. 

Group turnover rose to 
£11.6m (£9 .77m), 

Mr Ake Nordic, c h a i rman, 
said tiie interim results were 
most satisfactory and reflected 
both the increased turnover and 
higher margins indicated in his 
last statement and also interest 
savings arising from a farther 
reduction in the level of bor- 
rowings. 


“Trading during the second 
tradition ally much our 
strongest period, remains 
buoyant with a continuing very 
strong sales order position." 
said Mr Nordin. 

“The results tor this period 
will benefit also from an addi- 
tional saving in interest follow- 
ing receipt of the proceeds ot 
the rights issue towards the aid 
of tbe first half." 

After tax of SftflOQ 
(£ 18 , 000 ). framings per 20p 
share were increased to 5J6p 
(lAlp loss) net. ■ 

An interim dividrad of L5p 
(0-5p) was declared.. . 


BANQUE PARIBAS 



V.S. $200,000,000 
Undated Floating Rate Securities 

fa accordance with tiie provisions of the Securities, notice is 
hereby given, that for the three months interest period from 
11th September. 1987 to 11th December. 1987 the iiwfafwt 
Securities wiBcany an Interest Rate of 8% per annum. 
Interest due on 11th December, 1987 will amount to 
US. $20.22 .per U.S. $1,000 undated Security. 

Morgan Guaranty Tnst Company New York 

London 
Agent Bank 



GENOSSENSCHAFTLICHE ZENTRALBANK 
MOIENGESELLSCHAFT^ 

Vienna 

U.S. $50,000,000 Floating Rate 
Subordinated Notes Due 1992 

For the three months 11th Septembei; 1987 to 
11 th December, 1987 the Nates will carry an interest 
rate of T'Vte per cent per annum. 

US. $10032 

Listed on the Luxembourg Stock Exchange. 

By: Morgan Guaranty Ihist Company of New York, London 
Agent Bank 





CIV AS 4 | 
U-5-5200 


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Financial Times Friday Seitemberll 1587 

APPOINTMENTS 

- •-;• •— - ' -- r -; - ' 

Promotions at W. H. Smith 


W. H. SMITH AND SON rEMPIiBT^. GAI3RAITH & 
(HOLDINGS) . lias promoted IhaNSBERSR. bto been appom- 
two senior managers to the ted a 'nwt board director- ^ He 
main' board. MxDavfd Roberts, replaces, .ft; VUrcxa St web, a 
managing director of the retail - non-encg» director, who has 
group, and Mr Neil - Thomas, .retired, - ... . 

managing director of the do-it- - _ 
yourself chain,' Do It All, will 

join the board on Jane 4 1988. ta racoon 

Mr Thomas will also move, to TyS^M? 

Donfiloticmaios chief executive 
director of W, H. Smith and an^ MrYSon. becomes an execu- 
Son (Holdings). ■ tive Victor- 

in. DaVaHta Ttf W ^ -* « . • - 


Thompson. Mr Buckland Is 
general manager, Thompson 
defence projects, Wolverhamp* 
ton; Mr Masson is general mana- 
ger of Thompson Valves, Poole. 
★ 

Mr Vanm E. Treves, a non- 
executive director of BBA 
GROUP, has been appointed 


Mr Roberts- Joined W. H. "T “ 

Smith in 1971 as a management At »e close of the annual 
trainee. He was appointed meetlc. of the ASDA-MFI 
managing director ' of the GROIY Mr E. G. Bonufleid, Mr 
retail group, based- in Swindon,-- -a.-. e G ardtaer and Mr P. B. 
in 1986. . Bainr resigned from the board. 

Mr Thomas joined TV. H. Mr y»*es is succeeded as com- 
Smlth in 1973 as operations panysecretaiy by Mr J. A L 
manager and five years later MUT- 

was appointed divisional dtrec- i W4PCT . rnwprrrra cm, 
tor, retail distribution. He , 

became managing director of vOSL 

W. H. Smith Do It All in 1983. d?r^w He UK 

In his new role as groupdepug £? o^raeas ^SiagiS doctor 

managing, director be will 

carry a special responsibility *• 

for news wholesale in g, distribu- : ;^r Michael Maine, chairman 

tion and staff services. . ma n ag ing director of British 

Other management changes .irports Services, has been 
include the appointment of Mr. ^pointed an executive director 
Rodney Base, managing direc- -f BAA from October 2. Since 
tor, wholesale, as managing oining BAA in 1967 Mr Maine 
director of Do It All from April aas held various senior posts in 
1 1988. Hr Peter TrougMon airport management and per- 
becomes .divisional director; sonnel.He wiU retain his current 
news wholesaling, from Marc) fo f L*£ 

1988. Mr Buse joined, W. p wholly-owned 

Smith in 1062 and V 8ubsidiaiy B ^ A * 

Troughtbn in 1979. - ' „ r ^ G ^ has 

w . Tx i . ,„ . „ ^ been appointed president and 

chief executive officer of POLY- 
^LECTmCTTY^ftm GRAM INTERNATIONAL. He 
SSSL 1 ? 1 sSE; H succeeds Mr Jan D. Trimmer, 
October L He was deputy di*- new philips group manage- 

ment membership includes the 

diairmanship of Polygram's 
supervisory board. Mr Fine was 
executive vice president 




Mr Richard Leverfi finance 
director of EastenvJectridty 

tor of flnanf^>. He jcied Eastern 
Electricity, in 1970. Three years, 
ago he spent 1} yes on second- 
ment as financial^ontroller to 
the Jamaica Publh Service Cor-, 
poration. ... 

■'★j' 

Dr Hark UdtaV managing 
director of Temletbn Invest- 
ment Manageznen (Hong Kong), 
Far Eastern, -subsidiary of 


•w- : •' 
j - 

4 ; 
i •- ; 


Subsidiary 
board posts 
at NEI 


NORTHERN ENGINEERING 
INDUSTRIES has made senior 
appointments at NEI Elec- 
tronics, Gateshead; NEI Reyrolle, 
Hebburn; and NEI Thompson, 

Wolverhampton. - 

Mr Trevor Baxtram and Dr 
Stanley Jones have been 
. appointed directors of NEI Elec- 
tronics. Mr Bertram, is general 
man ager of the Edgcombe Instru- 
mentation systems unit, Gates- 
head. 

' i Mr Alan Richardson has been 
Appointed a director of NEI 
\ 'Reyrolle. He is general manager 
\*f the boshing unit, Hebburn. 
i. Mr Richard Bnddand and 
jfr . Cameron Masson- have been 
appointed directors' -of NEI 


Mr Vanni E. Treves, who be- 
comes deputy chairman of 
BBA Group 

deputy chairman of the company. 
He joined the group board on 
March .1 1986, and is senior 
partner of Macfarlanes, City 
solicitors. 

★ 

WILLIAMS HOLDINGS has 
appointed Hr B. A. Atkins as 
group managing director of the 
homes, and gardens, activities. 
This involves the' chairmanship 
of both Larch-Lap and Aradega, 
and the managing directorship 
of Banbury-Compton. 

Hr Alexander Duma has joined 
the board of EQUITY Sc 
GENERAL as a non-executive 
director. Mr Duma, a merchant 
banker, is a director of Barclays 
de Zoete Wedd. 

Mr Miles A. Seaman Joins 
LLOYD'S REGISTER OF SHIP- 
PING on September 14 as busi- 
ness director of its industrial 
services division. This division 
accounts for 20 per cent of inter- 
national turnover, and Is being 
expanded. After working for 
ICI and in consultancy, in 1980 
Mr Seaman was founder director 
of Technics, a company specialis- 
ing in safety -assessment and risk 
analysis in the process industries, 
offshore exploration and produc- 
tion systems. 

Mr Alan Nleholson-Florence 
has been appointed marketing and 
sales director of BRITISH AERO- 
SPACE naval and electronic 
systems division. The appoint- 
ment was- previously held by Dr 
David Smart who relinquished 
the post due to ill-health. Mr 
Nicholson-Florence was market- 
ing executive in the newly-formed 
'corporate marketing . organisa- 
tion. 


Chairman 
of Remploy 

Hr Ivor Cohen has been 
appointed chairman of REM- - 
PLOY. He takes over from Sir 
John Bembridge who was 
appointed at the end of April 

but Is unable to continue for 

health reasons. Mr Cohen, 
recently retired from the manag- 
ing directorship of Milliard, part 
of Philips UK. Four other non- 
executive directors have been 
appointed to the board of- Rem- 

S loy: Dr Bill Bogle, executive 
irector of Hoechst UK; Mr 

Derek Boothman, senior partner 
in Binder Hamlyn: Hr Keu 
Graham, recently retired as a 
commissioner of the Manpower 
Services Commission; and Hr 
John Yoong, senior partner in 
Arthur Young. 

+ 

ESCOMBE LAMBERT, part of 
the Hill Samuel Group, has 
promoted Mr Allan D. G. Noyes 
from joint managing director to 
chief executive. Mr Michael A 
OTi. Wallis, a director of Lam- 
bert Brothers Shipping, has been 
appointed managing director of 
Escombe Lambert 
★ 

TUSKAR RESOURCES has 
appointed Mr Michael Doherty 
as managing director. Mr 
Doherty has been managing 
director of Ardmore Petroleum 
since its foundation. Tuskar’s 
offer for Ardmore was declared 
unconditional last week. 

★ 

Mr Jean-Michel Six has been 
appointed managing director of 
DRI EUROPE, London. He was 
head of the DRI office in Paris. 
★ 

Mrs Juliet Jowitt has been 
electe d a director of YORK- 
SHIRE TELEVISION. She is a 
member of the Potato Marketing 
Board and of the Domestic Coal 


July 1987 


This announcement appears 

as a matter of record only. 



BANK FOR FOREIGN TRADE 
OF THE USSR 

-ZURICH BRANCH - 

SFr. 50,000,000 
4 %% Fixed Rate Term Loan 
1987-1992 


Syndicated Loan 

arranged by: 

bka bank FOR KREDIT und AUSSENHANDEL AG 



Interim Statement for 
Half Year to 30th June 1987 

(unaudited) 

ic Turnover up 15% to £10.6 mil&on. 

★ Pre-tax profit up 43% to £382,000. 
ic Earnings per share up 58% to 3.0p. 
ir First ever interim dividend oT 1.0pnet 

★ Forecast final dividend of 1.5pnetto 
make 2.5p for the year (1986 2.0p). 


Mrs Juliet Jowitt, a director 
of Yorkshire TV 

Consumers' Council, and is a 
local magistrate. A former 
journalist working on “House and 
Garden" and “Vogue," she ran 
a discotheque and catering busi- 
ness before setting up in 1971 
her own interior design company. 
Wood House Design. 


'jAr Board strategy looks tor 
further growth including 
acquisitions. 


lelit 


Building, Engineering and Electrical Distributors 

A apy of ttelWMBrimsttbriHrtf sooSbUb Aom (to Secmfiay PO B« 
GUmHcnoii Chapel Stott, Luton LU12SF. Tet 0582 27233 


MOTOR INDUSTRY 

The Financial Times proposes to publish 
this survey on 

Wednesday, October 21, 1987 

For a full editorial synopsis and details of 
available advertisement positions, please contact: 

COLIN DAVIES 
on 01-236 1434 

or write to him at: 

Bracken House, 10 Cannon Street •* 

London EC4P 4BY - - - - 

Telex: 8954871 

FINANCIAL TIMES 

EUROPE’S BUSINESS NEWSPAPER 




■ ' 

'•&SSss$ist$ 


m 





ere are good reasons for 


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These securities have been sold outside the Untied States of America and Japan. This announcement 
appears as a matter of record only. 


25th August, 1987. 


4[Taked^ ^ 

TAKEDA CHEMICAL INDUSTRIES, LTD. 

U.S.$80,000,000 

4 Vi per cent.Bonds due 1994 


Warrants 

to subscribe for shares of common stock of Takeda Chemical Industries, Ltd. 


Issue Price 100 percent. 


Morgan Stanley International 


Nomura InteniationalLimited 

The Nifcko Securities Co., (Europe) Ltd. 
Sumitomo Finance International 


Yamaichi International (Europe) Limited 
Fuji International Finance Limited 
Bank of Tokyo Capital Markets' Limited 
Credit Lyonnais 
Robert Fleming & Co. Limited 
IBJ International Limited 
KOKUSAI Europe Limited 
Merrill Lynch Capital Markets 
Sumitomo Trust International Limited 


Daiwa Europe Limited 
Mitsubishi Finance International Limited 
Banqoe Bruxelles Lambert S.A. 
Dresdner Bank Aktiengesellschaft 
Goldman Sachs International Corp. 
Kleinwort Benson Limited 
. Meiko Europe Limited 
Salomon Brothers International Limited 
Swiss Bank Corporation International Limited 


Union Bank of Switzerland (Securities) limited 







1* * 


■ ; ;r- vT 1 . ** 


Financial Tines Friay September 11 1987 


COMMODITIES AND AGRICULTURE 


Belgium 


proposes 

diamond 

‘alliance’ 


China tries to salvage 
its minerals reputation 


BY ROBERT THOMSON IN PEKING 


By Andrew WhHIey In Tel Awr 
A SENIOR Belgian Minister 
lias made an unexpected call 
for “ an alliance " between the 
Belgian and Israeli diamond 
industries, long-standing 
rivals, to face a common 
threat from lower cost manu- 
facturers in the Far East and 
Soviet Union. 

The appeal for co-operation 
made by Mr Mare Eyskens, 
the Belian Finance Minister, 
during a visit to Israel^ this 
week, received an enthusiastic 
response from Israeli diamond 
industry leaders. 

Mr Moshe S chi tier. Presi- 
dent of the Israel Diamond 
Exchange referred to Mr 
Eyskens’ call for the two 
countries to explore the 
possibility of making their 
productive capacities compli- 
mentary as “a most important 
declaration.” 

Israeli exports of cut and 
polished diamonds In the 
first half of this year defied 
forecasts that a plateau had 
been reached by rising to a 
record $lbn — compared with 
SI. 7 bn for the whole of 1986. 

At the same time, however, 
rising costs have reduced 
profit-margins. 

In London Israeli Govern- 
ment officials have been hold- 
ing discussions this week, 
with the Central Selling 
Organisation, the De Beers 
subsidiary which controls the 
flow of uncut diamonds to the 
industry, on a possible in- 
crease in Israel's supply 
allocation. 

About 24 per cent of 
Israel’s requirement for 
“roughs.” expected to he 
worth between S500m and 
$6 00m this year, is provided 
by the CSO. But as the local 
industry has boomed over the 
past two years so its pressure 
on sources of supply has be- 
come more acute. 

The balance of Israel's re- 
quirement is met largely bv 
traders in Antwerp, contri- 
buting to the large trade 
balance in Belgium’s favour. 


THE CHINESE Government is 
attempting to salvage the coun- 
try’s reputation as a reliable 
supplier of metals and minerals 
after sudden surges and halts 
in exports that have left foreign 
companies with unfulfilled con- 
tracts. 

Much of the confusion in this 
centrally planned economy has 
resulted from a lack of planning 
and, in particular, blind compe- 
tition among the three main 
metals export corporations iu 
Peking. their sub-branches 
around the country and other 
provincial trade organisations. 
Also, some departments have 
simply stopped exporting be- 
cause of low world prices. 

Hare earth exports have vir- 
tually dried up sinceMay while 
the three organisations, the 
China Non-ferrous Import and 
Export Corporation, the China 
Metals Import and Export Cor- 
poration, and Mmmetals, 
attempt to establish a repre- 
sentative body to oversee 
foreign sales. 

The rare earth manager at 
the Non-ferrous Corporation, Mr 
Niu Yinjian, admitted that 
China's reputation has been 
damaged but suggested that 
exports would resume in a more 
orderly manner late this yean 
" We have to do a lot of pre- 
paratory work to set up the new 
body," he explained. 

Problems similar to those 
afflicting rare earth exports are 
to be found in numerous other 
areas. China’s antimony exports 
have fluctuated wildly, with a 
doubling of exports in the 
fourth quarter last year com- 
pared with the previous quarter, 
out a sudden slow-down this 
year- 

Japanese traders report that 


the Government appears to have 
pot a clamp on exports of crude 
antimony, though the flow of 
antimony ingots is continuing. 
Exports of rare metal alloys 
have fluctuated, and the supply 
of silicon has also been spas- 
modic, with the Japanese com- 
plaining that shipments, which 
were on time in the early part 
of this year, are now up to three 
months late. 

** One of the problems is that 
they are overbooking their 
silicon exports. They have 
signed too many contracts. 
Another problem is that the 
energy shortage has slowed 
production," one dealer said. 

Early this year the Govern- 
ment attempted to coordinate 
sales of tungsten, of which it 
has 50 per cent of the world’s 
reserves, by setting up a repre- 
sentative body similar to that 
being established for rare 
earths. Tungsten exports 
doubled in the fourth quarter 
of last year compared with the 
third quarter, over-supplying an 
already depressed market. 

Problems in the rare earth 
industry highlight the conflict 
among the Chinese corpora- 
tions. The chin? Non-ferrous 
Import -and Export Corporation 
controls about 50 per cent of 
exports; the <2iina National 
Metals and Minerals Import- 
Export Corporation, or Min- 
metals as it is popularly known, 
under the Jurisdiction of the 
Ministry of Foreign Economic 
Relations and Trade (Mofert), 
controls 25 per cent; and the 
China Metallurgical Import and 
Export Corporation, under the 
Ministry of Metallurgical In- 
dustry, also controls 25 per 
cent 

Officials at the Non-ferrous 


Tungsten policy under attack 


BY A SPECIAL CORRESPONDENT IN VANCOUVER 


Low Brazilian 
cocoa estimate 
‘realistic’ 


CHINESE REPRESENTATIVES 
at the Primary Tungsten Asso- 
ciation’s fourth International 
Tungsten Symposium in Van- 
couver this week were left in 
no doubt that their country was 
held largely responsible for the 
low prices which have forced the 
closure of most mines in the 
West. 


BRAZIL’S 1986-87 estimates 
for a main cocoa crop of 3m 
bags (60 kg each) and 
1.5m bags for the tempoiao 
crop are realistic, traders in 
the cocoa producing state of 
Bahia said yesterday- reports 
Reuter from Sao Paulo. 

One Salvador . trader said 
the rainless season had caused 
“more than enough damage.” 

The International Cocoa 
Organisation (ICCO) recently 
put Brazil’s October/Septem- 
ber crop at 270,000 tonnes 
(4 -5m bags), which was con- 
sidered far too low by on- 
don analysts, who put the 
main crop alone at about 
3.85m bags. 

Earlier estimates of 3.5m 
hags were largely affected by 
a prolonged drought, one 
trader said, adding the situa- 
tion could worsen if dry 
weather continued. 


With TJS/Chinese negotiations 
on an orderly marketing agree- 
ment still in progress, however, 
delegates were not surprised 
that tittle was learned about 
China’s tungsten export policy, 
which has seen sales recently 
at or below concentrates costs. 

Mr Jocelyn Wafler. ofChartetf 
Consolidated, which owns 
Beralt, the Portuguese tnngste^ 


producer, suggested that China 
should close the “back door" 
into Hong Kong, through which 
he said tungsten materials were 
leaking into the market, and 
buy back the 3,000 tonnes 
traders hold there, in order to 
boost prices: 

The Chinese should limit 
barter sales to the Soviet Union 
and Eastern Europe, be added, 
because some of that tungsten 
was being sold on and driving 
die price down further. 

They should also stop selling 
forward at prices linked to the 
quotation in London’s Metal 
Bulletin magazine, which Mr 
Waller churn ed, w ag vulne rable 
*tb manipnla6dhr^ abd they 
should charge more for their 

f^rro tunestejfr ^ 


Tight supplies lift wood pulp prices 


BY ROBERT G1BBENS IN MONTREAL 


WORLD PRICES for bleached 
kraft wood pulp and for light- 
weight coated paper used in 
advertising inserts are taking 
another upward step. 

Weyerhaeuser Inc, a major 
North American supplier of 
Northern softwood pulp to 
world markets, has increased its 


European and Asian prices by 
325 to 3635 a tonne and its 
domestic US price from 3575 
to $610. 

The move, effective October 1, 
follows increases announced by 
Swedish producers in the Euro- 
pean market, and is expected to 
be followed by other North 
American producers because of 


the tightness of the market 
Some North American pulp pro- 
ducers have put some grades an 
allocation. 

Pulp prices have been rising 
steadily over the past two years 
and the latest increase is expec- 
ted to lead to higher newsprint 
prices before long, and also in- 
creases in other grades of paper. 


Christopher Stobart reports on Brazil’s power problems 

Electric shocks for aluminium producers 


ALUMINIUM SMELTING is an 
energy intensive industry and 
in recent years Brazil has been 
able to offer producers the 
ideal conditions to take advant- 
age of that fact The country’s 
policy of encouraging industry 
with cheap electricity has been 
enhanced for aluminium com- 
panies with prices even lower 
than those charged to other 
industrial users. 

The confidence of the 
Brazilian industry has been 
severely shaken this year, how- 
ever, by the discovery that its 
apparently secure supply of 
cheap electrical power is 
neither secure nor particularly 
cheap any more. 

Even after allowing for the 
country’s notoriously high infla- 
tion rate, the rise in Brazilian 
power tariffs to al uminium 
producers this year means that 
they are no longer the bargain 
they used to be. And the 
exceptionally low rainfall level 
has caused problems in the 
supply of hydro-electric power 
to some plants. 

Apart from raw material, 
electric power is the largest 
single component in the cost 
of producing aluminium — the 
typical smelter uses 15,000 
kilowatt hours to produce one 
tonne of metal. 

In the period of more abun- 
dant energy supplies since 1980 
strong competition has de- 
veloped between a small 
number of countries with the 
natural resources needed to 
offer attractive power contracts 
to prospective investors In new 
primary aluminium smelters. 

The leading contenders have 
been Venezuela, Brazil and the 
Canadian province of Quebec, 
all with hydro-electric power; 
and the Australian states of 
Queensland and Victoria, with 
coal-based electric power. 

Brazil has been the favourite 
location, however, and this has 
been reflected in its production 
surge from less than 300,000 
tonnes in 1982 to a projected 
843,000 tonnes this year. This 
has consolidated the aluminium 



industry’s growing importance 
as a source of export revenue 
for Brazil — in 1986 its net earn- 
ings rose to 3456m. It has 
confirmed its important role in 
the industrialisation of the 
country's under - developed 
northern region. . 

During the 1980s Companhia- 
Vale do Dio Doce, the state- 
owned mining company, h** . in 
a joint venture with a Japanese 
consortium, brought on stream 
the 160,000 tonnes-a-year Albras 
smelter at Belem, near the 
mouth of the Amazon, and with 
Billiton of the Netherlands, the 
90,000 tonnes-a-year Valesul 
smelter at Santa Cruz, south 
of Rio de Janeiro. There are 
firm plans to double the size 
of the Albras plant. 

In addition BlUitoa . has 
joined forces with Alcoa of the 
US to build on the northern 
coast the 245,000 tonnes-a-year 
Alumar smelter, the largest of 
all the Brazilian plants. And it 
intends to increase Alum ax's 
capacity to 380,000 tonnes a 
year. 

This decade has also seen the 
expansion of older plants at 
SoTacaba, near Sao Paulo, and 
Aratu. on the northern coast. 

Proponents of further expan- 
sion have been given food for 
thought this year, however, by 
a double blow to the industry’s 
economic base. 


Four increases in power 
tariffs during the first half of 
the year added up to a rise of 
306 per cent in local currency 
terms and nearly 40 per cent 
in dollar terms. 

More serious, however, has 
been the . loss of reliability of 
power- supplies to some plants. 

The problem bos been con- 
fined to the region in the north- 
east of the country served by 
the Companhia Hidro-EIeotrica 
de SanFraocisco (CHESF), 
which generates all its power 
from the San Francisco river, 
but it has been bad enough to 
cause production losses of 
almost 4,000 tonnes a month, 
worth over $6m at the current 
price level. 

‘ Rainfall m the wet season 
of late 1986 and early 1987 was 
the lowest for 54 years, while 
demand for power was abnorm- 
ally heavy. To make matters 
worse there have been delays 
in the construction of a new 
1.500 aw station in the com- 
pany’s system. This was due to 
produce power in 1986 but will 
now not be on stream until the 
end of this year at the earliest. 

The smelters hit by the 
power shortage are Alcoa and 
Billiton’s Alomar and Alcan's 
Aratu. Doubts about the avail- 
ability of power are also delay- 
ing a decision on the expansion 
of the Alumar plant: 


The neighbouring utility, 
Electronorte, has a surplus of 
power from its Tucurui hydro- 
electric station which would be 
more than sufficient to make up 
the CHESF deficit But the 
transmission capacity between 
the two systems is limited to a 
single 500 kv line, and that is 
already overstretched. A branch 
of that tine supplies Alumar, 
which is why that smelter has 
had to suffer from the power 
shortage. 

Six construction companies 
are working on the doubling of 
the 800 km line, but their work 
is not likely to be completed 
before April next year. 

By then, assuming a normal 
rainy season, normal service 
should have been restored any- 
way. 

The fundamental problem of 
insufficient investment in the 
generation, transmission and 
distribution of electrical power 
to meet a demand which has 
been growing at more than 7 
per cent a year since 1980 will 
remain, however. 

The plain fact is that 
Brazilian utilities have been 
selling power too cheaply. 

A recent government report 
warned that the risk of power 
shortages in the south and 
south-east of the country have 
increased significantly and that 
sustained capital investment of 
the order of SSbn a year will be 
required if forecast demand is 
to be met. Otherwise the region 
could be faced with the sort of 
problems now being seen in fbe 
north-east. 

The only available source of 
major finance, however, is the 
World Bank, which will only 
lend on the condition that power 
tariffs will be raised to produce 
a 10 per cent return on capital 
employed by 1990 — hence the 
steep rise in charges this year. 

Given that the return was 
negative last year further large 
price increases appear inevi- 
table, and the days of offering 
such generous terms to alu- 
minium producers in Brazil 
must surely be numbered. 

Christopher Stobart is a direc- 
tor- of Commodities Research 
Unit 


16 662 ! 1647.* I 1097,1* 

(fine September tg J 331— 100) 

DOW JONES 


Dow ■ Sep. fte 


Corporation are, in principle, 
in charge of all rare earth 
exports, but control only half 
because many of the reserves, 
which amount to at least five 
times that of the rest of the 
world, are found in mines run 
by the Ministry of Metallurgical 
Industry. The officials will not 
say exactly how much has been 
exported, though the total is 
believed to have been about 
20m tonnes a year in recent 
years, with a sudden jump In 
the second half of last year. 

Mofert has no mines of its 
own, but, remarkably, has been 
securing supplies by offering 
mines under the jurisdiction of 
Non-ferrous and Metallurgy 
Ministries more money than 
their own governing body is 
prepared to pay. As a Non- 
ferrous Corporation official 
explained: "It is now their right 
to do this. The mine owners 
now have the authority because 
we have been trying to decen- 
tralise” 

Mr Niu Yinjian said the 
Government’s aim in reorganis- 
ing metal and mineral exports 
is to find a balance between 
decentralisation and control. 
He was confident that in his 
particular area, rare earths. 
china will not suffer because of 
its tarnished reputation: "It is 
not a big problem. A lot of our 
rare earths have been produced 
in many other countries. 

The Chinese have even 
refused to negotiate with their 
largest rare earth buyers, the 
Japanese, in recent months. Mr 
Niu said this was because “ we 
have a period of adjustment,” 
but a Japanese company repre- 
sentative said simply that the 
Chinese were "very unreliable.” 


in. : nrtti i *« 
a !«fio !•* 


US MARKETS 


844/28*0 

B142.7S 


AFTER A quietly - steady 
mn rnlng , precious! metals 
moved higher in tfe after- 
noon on trade buyiniin gold 
and fund and sptulaflve 
buying in silver, I which 
touched off stops, Veports 
Drexel Burnham Unbelt. ■ 
At the highs pro» along 
emerged to pare Wains. 
Copper steaedied on fund 
and trade buying Were 
ygrtiiiiff in mid-rangi on 
profit-taking. Crude! oil 
rallied on fund and rude 
buying which touched off 
commission house tops 
before good trade sttng 
above $19.70. basis Odder, 
pulled prices back. (fad 
manufacturer, trade and Hal 
buying firmed cocoa in ew 
trading, forcing . commissi 
bouses and speculators t» 
cover their short position 
The market then drift* 
lower on arbitrage and speei 
latrae selling before trad 
buying re-emerged. Sugal 
fell on trade selling and 
remained on flu defensive 
imHi commission house and! 
trade - buying steadied the’ 
market towards the close. 
Coffee fell on local and trade 
selling before commission 
house buying emerged at the 
lows. Cotton firmed on com- 
mission house short-covering 
In the face of trade-selling as 
the market awaited yester- 
day's crop report. Orange 
juice was mixed as commis- 
sion houses sold September 
amt bought November. Live 
cattle and feeder cattle 
moved lower on technical 
selling and profit-taking. 
Hogs and pork beliles eased 
in response to large hog runs 
and lower cash prices. Maize 
firmed on commercial buying. 
Professional buying firmed 
soyabean meal but spread 
selling in the oil eased prices 
despite reports that India had 
bought soyabean ofl. 


Sept 138.00 

Nov 131.76 

Jan 130.05 

March 130.60 

May 130-96 

July 13036 

131.16 


PLATINUM 50 


136. BO 138.00 137 ZE 
131.80 13Z20 131.0S 
130.15 - 130-35 129.80 
130.60 130.70 130.30 
ISO. 96 131 too 13OJ0 

131 — — 

131.25 m.OO 131.00 


BY «Z. S/tn»y ox 


Oct 
Jan 
April 
July 

,22 

SILVER 5,000 troy OK cents/troy or 


804.0 

762.0 

806.0 

7602 

809.7 

755.6 

. — 

. — . 

BT7.0 

79S2 

824.0 

7572 


NEW YdRK 


An official of Mimnetals (the 
China National Metals and 
Mine rals Import-Export Cor- 
poration) described the sug- 
gestions -as “xonstructive.” 

The symposium had earlier 
considered the supply and de- 
mand balance for Tungsten pre- 
pared by the Primary Tungsten 
Association. This showed world 
production of Tungsten ores 
and concentrates falling 1,400- 
1,600 tonnes behind consump- 
tion in 1987-88. The projected 
shortfall represented 9-10 per 
cent of western consumption 
The implied drawndown in 
consumer stocks suggested the 
possibility of a price increase 
short" Term. - Tar the 
look was less encouraging 
medium term, however, the out- 

1 T ' * • • • 


46.62 47. 

43.32 43. 

45.00 . 45; 


CMh lM&*Uj+14 

S months 110834- t-t-13 


min. ecnta/SStb-taushci 


Official doting {am): Cash 1,091-2 SILVER 
(1.061-2). til re* month a 1.C75-5-5 . P* 

1 1,067-8), indMMt 1.082 (1262). Woy oz 
final Kerb dose: 1.083.5-84, r~T 

STANDARD 


6 months. WS5.10p 
12 months' 508. 76p 


788c +8 

772c +8 


163.0 1HLO 162* 

173.6 DU 172-6 
183.2 WO 1822 
183 J} WO 1872 

190.6 1922 non 

189.4 19) J) 1892 

3352 mo 1 MO 


Official dosing (sm): Cash 1.080-5 
(1.078-80). three months 1.0703 (1.062- 
5). settlement 1.068 (1.080). US Pro- 
ducer prices 80-88 cants a pound. 
Total ring turnover: 75.53) monos. 

lead — — — — — 


LME— Turnover: NH <)) lota of 10200 
QlsnC&3» 

Three months final fcsib: 771 -3c. 


COFFEE 


LEAD 


Official + or I 
«a (sun). — 1 WBMJOW 
£ par tonne { 


Persistant trade sening leapt ftobustss 
under pressure and easily absorbed 
commrealon bouse baying, reports 
Drexel Burnham Lambert. ' With some 
origins very dose to cur r ent levels, 
dealer* warm loppy to asU Into tbs 
m s that. ■ ■ ■ ‘ 


COFFEE ** C “ 37.600 lb*. 


Don Prav 

Sept 11525 TM20 11620 1 

Dee 117,70 IIS. 68 71820 117. 

March 121.02 121.56 12120 720. 

May 12225 12240 122.76 122jfil SOWIREAUS 

July 124.75 124 too UttoO 123.75: StoOO bg aria. 

Sept 12425 12U6 — . -i 

COPPER JStoOP 8 ml eantu/U* ! 

. ' Ctbse 1 PreV • 1 . tfioh 14*1 . Wli<t 
*2* « 2HS : ... *•» 5372 


Low 

M 01.70 BUBO 

m 60.76 69.70 

.50 6125 69.10 

60 toD 59.50 


Cash 1 4166 t +36 *417.78/617 
5 Months I 368.6-07 1 +1.78 1 398*585 


Official closing (am): Cash 417.5-8 
(4156). three months 397-7.5 (393.5- 
4.8), settlement 418 (416). Final Kerb 
close: 396.5-96. Ring turnover: 8200 
tonnes. US Spot: 42 cants a pound. 


NICKEL 



1810-1891 

1844-1383 

1366-1580 

1380-1364 

1861-1589 

1416-1406 

1436-1480 


Nov - -8020.’ 1 76.00 — -^'-GuS . 

Dee ' 75.70 ■ 7846 RU20 WS5 

Jen 79.06 77.85 — ~ ' Bep t 

Until 77 toO 76.66 78.16 7526* 

May 77.10 TfltoS 77.15 7S.80 * 

July - 7820 76. BO — — , 

Sept 78.20 7S.65 76.76 7826 kept 7712 

Dee 7620 76.80 7620 7526 JDct 


low 
8842 6V4 

8262 6172' 

63*2 623.0 

5372 8292 

8432 6342 

6442 6312 

T£402 -6372 
E3E2 6302 


COTTON 50200 Hm, cents/fb 


Unofficial + or 
dose ip-mj — 
£ per tonne 


Sales: 3.129 (3.033) lota at S tonnes. 
ICO indicator prices (US cents per 
pound) for September 9: Comp, daily 
1979 107.78 (106.19); 15-day average 
103.16 (10221). 


Cash f 3200-6 ( -2.6 
3 months] 3206-101 — 


COCOA 



Close 

Prav 

. High. 

LOW 

Oct 

7325 

73.16 

7420 

7326 

Dae 

7324 

72.85 

7420 

7320 

Merab 

74.45 

7427 

7S20 • 

7420 

M»y 

•7425 

74.85 

7620 

7426 

July 

74.48 

74.06 

3520 

7420 

Oct 

«to 

8826 

6625 

8820 

Dec 

€620 

66.15 

6720 

6620 

CRUDE ON. (LIGHT) 

42200 US geOorva, S/berrela 






.94 15.70 

27 15.79 


Official dosing (am): Cash 3,196-202 
(3,16695), three months 3.200-10 
(3.1803), aafDamem 3JXB. (3.J85). 
Fine I Kerb dose: 3,196200. Ring tura- 
oven 876 tonnes. 


Futures, despite trading hr good 
volume, were confined to a narrow 
range. htanutaetonn wan again 
prominent, but origin* remain reluctant 
to participate, reports Gill and Dtrfiua. 


High law sn 


Oct 18.71 1928 19.75 1928 larch 

Nov 19-48 192? 79.52 1922 lay 

Deo 1929 19.17 1923 19.18 dy 

Jan 1926 19.14 1925 19.14 ug 


ZINC 


fe s terd ny 's 


17.70 

TO.ve wjs w.i* jg 1720 T720 172 TTJO 

222® 22-2S 2S-2 1** w an 1725 i t£ 


Hh or I Burin ese 


Man* 1927 19.13 1927 192S 4* 


1724 1725 1725 7724 


Unofficial + or 
slose (p.m.) — 
£ per tonne 


High/Low 


Cash 
3 months 


460.6-61/ +723 I — 
465226] +826 |466r46 


Official closing (am): Cash 460.6-1.8 
(447-7.5), three months 465-6 (452-3). 
settlement 481.5 (447.6). Final Kerb 
close: 466-6, Ring turnover: 7.825 
tonnes. US Prime Western: 43-47 to 
cents i pound. 


Sept-... 1167-1178 +4,6 1174-1170 

Deo--—.-. 1605-1906 +52 ***■'■• 

Marsh, 1835-1938 +42 

May 1959-1260 +62 

July 1878-1261 +4to 

Sent— 1898-1301 +4.8 

Dec-—--*-} 1S19-13B2 +3.0 1HM817- 


Aprfl 1920 19.13 1920 19.15 tejs: 

May 1922 19.13 1922 19-3 SStL , mt riMm , , . 

June 1920 19.13 1920 1920 wWt/MWwtid 

July 19.10 19.13 19.10 19.10 _ Close Prav High 




July 19.10 19.13 19.10 19.10 . Close Prav High tow 

2822 2832 2832 8802 

SPOT Process Chicago loose lard JJL »62 267.4 296.0 

IStoO (him) cants P«r pound. Handy *®.2 SOI* 22“? 

and Mermen silver bullion 784.0 (750 to) Ti ZJ5-4 2942 2974 Z962 

cents per troy ounce. New York tin jSS SIS’® 

318-319 (same) cents per pound. fgg. TSStA 2882 287.4 2872 


Seles: 4.113 (6268) tots of 10 tonnes. 
ICCO tndlcator prices (SDR* per 
tonne). DaHy pries for September 10: 
1205.18 (1.49&48): NWay average for 
September 11: LS53.75 (1264.41). 


KUALA LUMPUR TIN MARKET—Oose: 
1628 (1825) ringgit per kg- Up 0.03. 


FREIGHT FUTURES 


Uncertainty prevailed during a very 
quiet day, giving rise to wide spreads. 
Switching between October and January 
was evident. Unit physical news was 
reported except a rumoured Guff/ 
Taiwan fixture at 91S20 which was felt 
to be slrghtty bearish, report * CJirkaoit 
Wo HI. 


158.00 sellers. Barley: English feed: 
Jan/March 109.00 buyer English. 

HGCA — Locational ex-farm spot 
prices. Peed bariey: S. East 9420. 
W- Midlands 94.20. N. West 9620. The 
UK monetary coefficient for the waek 
beginning Monday September 14 will 
remain unchanged. . 


SUiAR 


*i^ 5 ESL i ?|K i * v HW*~*sw sugar 

up 5320 (up £320) 
sunnier Sspumbar-October delivery. 
White igar $185.00. up 51.00. 


LONDON METAL EXCHANGE 
TRADED OPTIONS 


POTATOES 


) Ctooe I High/Low i 
Dry Cargo 


The market again took He cue from 
easatber pro s pec t s, end with the Imme- 
diate forecast remaining unsettled, 
furores held steady. The day’s range 
was quickly established during early 
trade and the bulk of the session saw 
limited movement In thin volume, re- 
ports Coley and Harper. 


fatorrTi Pr avion* Buainesat 
■4040 dose done 


Mo. 6 Raw 


Alum in- — 

lum — 

99.7X - 


Nov. Jen. Nov. Jen, 


Alumin- 1,975 
lum 1,600 
99.9X 1)635 


1,975 - 64ij« SI 

1 600 73 86 to6 1061* 

1,635 (61 — — 


Oct. 1088 !i067nr78ioeo/i0B5 
Jan. 110511110 1110:1099 . 1115 
Apr. 117Brliart 11BO 1280 

jSjjT 1085 1068 1 new 1090 

Ort. 1140 — 1100 

SS 1160 - 1180 

April 1810 - — 1200 

SfL 1061.5 - 1061 to 


Month 


E per to nne 


Oot™„ IM.ona 

Deo 144.le.e 

Mar — 

M*y 1E7.$S2- 

Aug 181.8-1 a 

Oct lB«.8g,4 

Deo mi- jg 


1392-189 
144.4-144 
1SS 2-163, 
7972-157, 
1812-191 
1BB.M 
194.8-1 


141.8-1372 

1842-144.9 

164.4-1612 

1642-1962 

1922-1982 

1862-1862 


iadv 


Nov. — -j 86.60; 86.80,66.0086.60 
Fob. — J 96.00 92.80) — ’ 

March-] 85.50' 8620.86.00 

Apr. 133.90 139.80:15420-133.00 

May. J 148.5014620. 148.00-147.60 


Copper 
lOrade , 


H 1,725 1 — — 138 731e 

-assssrar - 

flf k &.N. i 


Copper 
(Grade j 


Turnover: 71 (32), 


Sales: 328 (618) lots of 40 tonnes. 


No. S Whites 

Oct. 184.9-1 a | 

Dec-.-. 1842-1(0. 

Mar 1882-lifr I 

May-..- 191.0-19) 

Aug 1962-1* j 

OoL.._ 199.4-28 i 
Dec 291.0 1 


181. 9- 184.01 194,0-1*22 

188.9- 1842 1*4.9-1822 
1872-189,9 IBS. 9-1872 
1M2-1812 1822-1922 
1M2 1892 19*2-1942 
1872-1992 TIBto 
1822 — 


GRAINS 


GOLD 

GOLD BULLION trine ounce) Sept. IQ 

Ctoee MS9V46oi# (san^STVa 

Opening- *467-46718 (fan® }+£?**** 
STn'o f& 4461.00 (fiZMtoOO) 

Alfn-nfbC *46020 (6379214) 

Day's Irish *4611# -4619* — 

tog's tow 8466 -4671# — 

BOLD AMP PLATINUM COINS 


Consumer buying pushed wheat 
values to further contract highs but 
then prices eased. Barley attempted 
to steady but dosed with shippers keen 
to liquidate long positions, reports 
T. G. Roddick. 


BW 


WHEAT ,1 BARLEY 

r sat*rtfy*Sj+ or }Yest , rdy's;+ or 
olose \ — . I dose — 


CRUDE OIL — FOB (« per barrel) Sept. 

Arab Light....... — | — 

Arab Heavy— ... — f — 

Dubel 17.08-17.1 oUto. 14 

Brent Blend 1623-18.46 +0.396 

W.T.I. (lpm edt)--.. 19.66-19.7^+0.68 


Forcadoa (Nigeria) 
Urale(clf NwS 1 


Sop.— 106.16 +0.7* .9825 +02* 

Nov— 105.80 +020.100.90 +026 

Jan— 10820 +0-2C 103 toQ +020 

Mar— 110.60 +020 >06.08 +026 

May— HUB +O.H 10720. — 

July— 11620 +028 — — 


HIb 2473-47B __ 
__ aaf*473»a-476i» 

Kr'g’r'nd-9468-461 
is Krug. - 43341, -843S, 
14 Krug— tuau-lWHi 


AngeL *471274 

inf Angel84BistoOis 
New Sen. 6IOB-10? 


Old So*. . . 2108-109lt 
NbWa Plat 4606-614 


(8887-890^) 
IBnUt-HBlil 
(£878280) 
{£1473,-2481, > 
(£? Q^.-76H) 
(£286 U- 288 1«) 
(CT75,-30M 
(£$5%-664) 
(£66 la -661 b) 
(£368^-373^) 


Daily prlco G 78 Kin ? ^September 9: 
348 (Mme). ? 3>i 


PRODUCTS — North West Europe 
Prompt delivery of (6per tonne) 


GAS OIL 


ilTUl 


MEAT 


MEAT COMWISSfOH— Averag a ftl- 

staek prices at representative markets, 
OB— Cattle S7.7Sp per kg hr (—0.73). 


G 8 - Sh ee p 163.44P par kg Sat dew 
{-6ffil. GS— Pisa 77to7p per feg iw 
(+2. *3); 


Business done— Wheat: Sant 10620- 
426, Nov 10920-620, Jan 109.50-8.15. 
March 111.00-101601 May 113.60-3.10. 
July 11520-6.90. Salta: 898 leta of 

100. tonnes. Barley: Sept 9*26. Nov 

101. <S-O20. Jan 103.8M.70. March 
10828-6.00. May 107.80. Sales: 176 
lots of 100 tonnes. 

LONDON GRAINS— Wheat: US Dark 
Northern Spring No 2, 14 per cent: Oct 
*.75. Nov 9720- US No 2 Soft Red 
Winter: Get 9220. Nov 92-25. french 
11^12 par cent: Oct/Nov 137.50. Jan/ 
March 14220. Aprif/June T 48.00 sellers. 
English lead, fob: Oct 107-25-107.75. 
Oet/Deo 10*20-10920. - Jan/March 
112.00-112.fia April/ Juris 11520-116.00 
buyer/seHera. Wslra: US No 3 Yellow/ 
Franch, vanshlpmant Baal Coaaa Sapt 


Premium gason 
Gee Oil.....!!™— , 
Heavy fuel OIL- 
Naphtha 


1 sasonne.J 172-170 — 

153-168 + ij 

ol OIL — 95-88 +8 

166-1581 +2 


to Business 
*“ I done 


Petrolouni Argue astknatae 


SOYABEAN MEAL 


festerd*yaj -f ori Business 


Oot 

NOV— ^ 

Deo....^ 
Jan—_. 
Feb. — 


E ®l:Bassas 


October. 

Dec 

Fob — 

April — 

June.—. 

August... 

October. 


£ 

per tonne > 

- 1492-1542 +0.3$ 

- 1272-1992 —028 

- 125.6- ISO. 6 +O.M 

- 1982-1812 +O.SG 


C M,ri 4 ’ 183 lot. or in 


ia.6-1382 +0 !m| 126.0 


..J 124 .8-1 36.0 1 4-0 
.Jl2S 2-1272 1 + 0 


198 (803) lots of 20 tonnes. 


Rubber 

rirssssTsa ices (buyers; 

<«7Sp): ^ Jgi to S9-M 

iSSTjt 

a®- 0 ^r^aTi^iS. 


tW jJi j 





Jjjjpjjji jy. ^ 


























fe-3 % 


Financial Times Friday September 12 2987 

CURRENCIES, MOTIEY & CAPITAL MARKETS 


5j $ J 

si aU 

HI] 

i-m 

S* 2? $ 

■IS! 

§81 

vS ' M 

SS 

p^| 

•Ss 

~S--£5>^ 

SS jTi 

6»n t, lJ $ 

en, * 

«=? 5 

$ ti 


2-*. t 

tTgt 

tjj ?* 5 

5* 1 Is 3 
;» S 5 

i* ;l5 

-j* * ii 


50 


nan 


J*c »>ft 
^O^aTaS? 1 




j"V 

•:tVO 


FOREIGN EXCHANGES 


Short covering boosts dollar 


FINANCIAL FUTURES 

Gilts and bonds below best 


BancA^nerica Options and INSEAD 
Present 

An Intensive ; Hands-On, Three-Day 


AS THE market reached a state of Sterling Remained qdiet The gained on covering of short posl- 
complete confusion about today's .. UK retail prices lode* Tor August tions ahead of the US trade 
US trade Ggures.the. only safe will he published today and is figures. 

course was to bay the dollar, in an expected to shew little or no Dalers were divided about the 

attempt to square positions,, or at change in the level of year-on-year likely impact of the figures, with 
least limit potential losses. inflation, it appears likely the some indicating an increase in the 

Forecasts , for the July deficit pound will be more affected by July deficit was already difr 
have been in the region or $15bn the US trade figures. counted, while others said the dol- 

and $l6bn, compared with The pound lost ground to a fir- lar will soon test the lows seen 
$lS.7Um in June, but the range of mer dollar, hut was stronger earlier this year, but the down- 
estimates covers from flSbn to against European currencies and ward trend would include tempos 
$17bn. and it has been' rumoured the yen. I- ary rallies, 

the figures could be as high at ■ sterling fell 60 points to SL6445- JAPANESE TEN — Trading 

$20bn. 1.6455. but rose to DM 2.9725 from range against the dollar hi 1987 is 

With so many different forecasts . DM 2^050; to FFr 9.94 from FFr i»45 to I3&35. August average 
it Is DOt clear what the initial 9.9275- to SFr 2.46 from SFr 2.4550; U7JS7. Exchange rate index 223J 
impact of a deficit in the region of and to Y234L50 from Y233.75. against 209.8 six months ago. 
SlSbn will be, and bow much this km&bK — Trading ranee The yen lost ground to the dollar 

has already been discounted. .eainstthe dollar in 1987 is iSws ToA y° as the Japanese trade 

Yesterday's news of a cut in the ^ i.7e§ < August average 1.8573. declined in August 

Japanese tradesurplus, Including nde index 147.0 against Rumours the surplus would be 

a reduction In the surplus with the 14aj , mmOis aeo. lower led to a rise in the dollar 

US, provided the dollar with sup- ^ during the morning, but dealers 

port but also added la the confu- . The ?■**? f* . u,e reported strong selling interest at 

sion. The Japanese figures were “ ,B “a nraurt trading, around Y 143. The dollar touched a 

for August, and the US figures will TwUS currency rose to DM1.8035 peak of Y 142. 95. before dosing at 
be for July, when the Japanese y.,. t Sg.. F g Blt ? l . rt , . Crora YI42.65 in Tokyo, compared with 

surplus was much higher. ' pMJ_71HQ, highest finishing Y 14 3 -45 on Wednesday. 

On the other band- the news did w ** t . ... . . In August the Japanese trade 

encourage hopes that even if the The Bundesbank did not Inter- surplus fell to S5.15bn from 
US deficit is bad In July there will J'* 0 ® “ j U . J \ ^ e do1 " in July, and from $7.4Sbn a 

have been an improvement ii iar was fbced at DMLa053. com- year earlier. Japan’s surplus with 
August pared wiUi .DMI.TO28 on Wednes- the US was cut to $&73bn in 

The dollar moved, back above day-The fixing was near the upper August from S4.79bn the previous 
DM 1.80, rising to DM 1.8065- from - ° r a narrow trading range in month, and from $4.4lbn in August 
DM L7965. It also unproved to to® morning, as the US currency Wflfi 


will be published today and is figures. 


expected to dhow little or no Dalere were divided about the December long term gilt futures surplus. 


change in the level of year-on-year likely impact of the figures, with 
inflation. It appears likely the some indicating an increase in the 


pound will be more affected by July deficit was already dis» 


the US trade figures. 


counted, while others said the dol- 


The pound lost ground to a fir- lar will soon test the lows seen 
mer dollar, hut was stronger earlier this year, but the down- 


against European currencies and ward trend would include tempor- Gilt futures touched a peak of stability. 


the yen. ‘ 

- Sterling fell 60 points to $1.6445- 


ary rallies. i 

JAPANESE TEN — . Trading 


1.64®, but rose to DM 2.9725 from range against the dollar in 1987 is 
DM 24650; to FFr 944 from FFr I59 -45 to 13845. August average 


9.9275; to SFr 2.46 from SPY 2.4550; 14747. Exchange rate index 223J 


TRADING on the London Inter- benchmark 8 7 <% per cent 30-year big at 100.47 fbr December deliv- 
national Futures Exchange was bond recovered in the cash mar- eiy, compared with 9940. The con- 
nervous. dominated by concern ket as the dollar rose against the tract opened at 10040, after Ihll- 
about today's US trade figures, yen on a cut in the Japanese trade log in Tokyo to close at 100.13, 


from 10040 on Wednesday, but 


Foreign Currency 
Options Workshop 


recovered a little of Wednesday's Earlier in Chicago and New improving from the opening level 
losses at the LifTe opening. The York sentiment improved as the ®f. 99^70. Trading in Tokyo was 
contract began trading at 113-28, dolar recovered, and trader sug- thin, with Japanese bond futures 
influenced by the improvement in gested the rise of nearly 50 basis recovering on short covering, on 
US bonds, but wary about ster- points in bond yields over the past fears of baa US trade figures, 
ling's slide below $1.65. week and a half may bring which dealers suggested may 


ling's slide below $1.65. 


September 29— October 2, 1987 
On INSEAD’s Executive Campus 
In Fontainebleau, France 


encourage 


114-13. before easing back in line Dealers were generally not pre- Japanese securities as a hedge 
with bonds, to close at n4r03.com- pared to go too Ear ahead of the against losses in US Treasury 
pared with 113-22 on Wednesday, trade figures however, and bonds. 

US Treasury bond futures December bonds fell back from a On the other hand rumour that a 


and to Y234J50 from Y233.75. 
D-MARK — Trading range 


against 399.8 six months ago. | 
The yen lost ground to the dollar 


against the dollar In 1987 is 1.9305 T , o4 y° M f? e Japanese trade 
toLTKW. Angus! average 1.8573. ™n»lus declined in August 


US Treasury bond futures December bonds fell back from a On the ot 
gained ground at the Liffe open- high of 83-10, to finish at 82-29. Japanese mutual savings bank has 
ing. with December delivery star- against 82-04 previously. suffered large losses on bond 

ting at 82-04. This followed a Japanese Government bond trading continued to undermine 
recovery in Tokyo, where the futures were firmer on Liffe, doe- sentiment 


On the other hand rumour that a 


Topics covered include Currency Option Pricing, Volatility. 
Managing px 8kk and FX Option FonJulios, 
and Advanced Option Strategies. 


Exchange rate index 147.6 against the surplus would be 

14&8 six months ago. J ° w ? r led to a rise in the dollar 

during the morning, but dealers 
. The D-Mark easedj®»inst the reported strong selling interest at 
dollar in thin Frankfurt trading, around Y143. The dollar touched a 


The US currency rose to DML8035 peak of Y 1 42. 95. before dosing at 
S^ l £2.« F 2 ,lk t- rt wJj 0 ?? ■ ? oni Y142.65 in Tokyo, compared with 


DM1.7940, the highest finishing y 141.45 on Wednesday. 


level of the week. 


In August the Japanese trade 


The Bundesbank did not inter- surplus fell to $S.15bn from 
yene in FYankfurt. when the dol- $095bn in July, and from $7.48bn a 


LIFFE LONG GILT FUTURES OPTIONS 
Soto CNb—Laa Patt-Ud 
' Fncr Dm Mvch Dm Hock 

IDS 633 723 027 LU 

110 434 5.60 0.48 W 8 

U2 326 4.44 120 232 

114 235 328 209 3J6 

116 1.24 233 3-18 *23 

JM 033 133 4.47 541 

120 029 US 623 70b 

122 035 05b 809 644 

frtiMwd whime total. Cans 623 Pus 1804 
Pmfen day’s opes Inc Cafe 19,918 Pus 13402 


LIFFE US TREASURY BOND FUTURES OpmiiS UFFE FT-SC UW HIDEX FUTURES OPTIONS 


Calls— Last 
Dm March 

7J.9 6.47 

5.42 5J4 

4.03 358 

2-55 253 

134 152 

05b 1.20 

039 054 

0.14 034 


Pats— Last 
Dm March 
035 0.45 

0.48 157 

1-09 156 

151 251 

2j45 360 

352 5J8 

53S 652 

720 832 


Estimaun ntaM total. Cans 30 Pm 61 
PreikBS day's open Inc Cads 771 Puts 283 


Cafe -Last 
Sen. OcL 
2.48 803 

202 6.70 

131 552 

Oifi 450 

0-48 352 

027 258 

035 226 

008 1.75 

004 134 

052 UK 


PuhrUa 
Sen. OcL 
438 4.43 

5j82 630 

751 7.42 

952 8.90 

1L78 1052 

14.07 1226 

16.45 1436 

1858 1635 

2134 U24 

<082 20.42 


To obtain a brochure and registration form 

please contact Hope WohL Phone 215-864-9900. 

Telex 4941638. Or write to BanrAmertra Options. 

181! Chestnut Street, Philadelphia. Pennsylvania 19103 USA. 

Early registration is strongly suggested due to limited space. 


Ealmtcd voJme total. Cafe 0 Pm 0 
Pievtaes (fay's open ire Cafe 479 Pm 237 


August pareu -wiin .um 

The dollar moved, back above day. The fixing’ 
DM 1.80, rising to DM 1.8065- from - «“■« a narros 
DM L7965. It also improved to «• morning, ai 
Y142J0 from Y 141.55; to 

SFr 1.4950 from SFr L4870; and to EMS EUROPE 
FFr 6.0425 from FFr 6.0125 ■■ 

On 'Bank or England figures the 

dollar's index rose' to 10&8 from 

100.4. ' 

STERLING — - Trading range BttgimFfw 

against the dollar in 1987 is 1-6885 D atfehK rawe 

August avenge JJ98S, 

Exchange rale Index was DuaaGmiiter — 


EMS EUROPEAN CURRENCY UNIT RATES 


unchanged at 72.9. compared with Irish pant . 


72J six months ago. 


42.4582 

7J85212 

2JD5853 

6.90403 

231943 

0.768411 

1.48358 


Currency 
amounts 
against Ere 
Seat 9 

%■ change 
from 
central 
rate 

435713 

+1.44 

. B52472 

+2.20 

257207 

+0.66 

6.93522 

+0.45 

253239 

+056 

0.778639 

150159 

+133 

+133 


% change 
adjusted (or 


M er g e nc e 
Umh % 


± 15344 
± 15404 
S 13981 
±13674 
±15012 
± 15684 

a 40752 


UFFE C/S OPTIONS 

C 2 SJM 0 (cert* per £11 

Strike Calts— Last Pm— Last 

Price Sept- Oct. Mm. Dec. ScpL OcL No*. Dec. 

1.45 1955 1955 1955 1955 (LOO 050 (LOO 002 

150 1455 1455 1455 1455 050 050 054 032 

155 955 955 955 955 0.00 056 026 055 

1.60 455 4.70 550 536 050 055 1.15 1.71 

165 (L25 1.60 235 255 0.72 255 330 450 

1.70 050 031 049 151 5.47 636 654 7.46 

1.75 050 0.03 0J6 032 1047 1058 1131 LL77 

EStAnaed wftrn tout, Caifc 0 . puts fl 
PreWota day's open InL Calls 284 Pnc 1529 


LOUDON SE Ol OPTIONS 

02500 (ceafa per rtfe 

Strike Cafe Last Pats- 

Pnce Sett. Oct. No*. Dec. Sept. oo. 

1.45 12.70 — — 12-90 150 — 

150 1620 1620 1620 1620 030 030 

155 1120 1120 1120 3320 030 030 

150 620 620 630 650 030 050 

US 0.90 250 2j40 330 050 150 

1.70 030 050 135 150 450 550 

1.75 050 — — 120 1530 — 

Previous day's open fete Cafe 947 Puts 159 
Volume: 27 


tine. Dec. 

- 270 

030 0.40 

0.40 065 

150 150 

280 330 

550 635 

— **■*■» 


The fifth' 


£ IN NEW YORK 


Changes are for Ecu, therefore positive change denotes a weak currency. 
Adjustment cakutaued by Financial Timet. 


POUND SPOT — FORWARD AGAINST THE POUND 


PHILADELPHIA SE 09 OPTIONS 
02508 (cento per O) 

Strike Call u— Last Pm— Last 

Price Sere OcL No*. Dec. SegL Ore Nov. Dec. 

1.575 750 7.00 7.10 730 — 0.20 060 0.95 

L600 430 450 S30 550 — 055 0.95 150 

1525 230 350 3.40 3.70 — 130 — 230 

1550 040 150 230 240 050 230 350 3J0 

1575 030 055 125 150 1260 355 450 1550 

1.700 — 035 U7D 0.90 500 — 640 750 

1.725 — 035 030 050 750 5J80 850 290 

Pttvttta days open W: Calls 151550 Puts 1502*0 
Previous day's wtane: Calls 1234 Puts 70S 


UFFE7EU«OOOLLA« OPTIONS 
Dm uniats af MQ% 

Strike Cafe — Last 

Price Sere Dec. Mar. 

9150 151 0.43 • 040 

9L75 0.76 029 030 

9250 051 038 022 

9225 027 031 035 

9250 0.06 056 030 

9275 051 053 056 

9350 050 051 004 


Prcvtas dafl open ire Cafe 2507 Puts 3587 
Estwated voksuc. Cals 180 Pits 81 


Puts— Last 
Sere Dec. Mar. 
050 029 068 

050 0.40 023 

050 054 150 

051 0.72 138 

055 0.92 138 

025 134 159 

0.49 137 182 


FT City 

Seminar 


JAMBESE VEM (IKK) 
V325m S per VUO 


Plaisterers Hall, City of London 
30 September, 1 & 2 October, 1987 


For Information please return this advertisement, 
together with your business card, to: 

Financial Times 
Conference Organisation 

2nd Floor, 

126 JBtmyn Street, London SW1Y 4UJ 

Alternatively. 

telephone 01-925 2323 

telex 27347 FT CONF G Fax: as tel no. 


US. INDEX LID. 9-11 GROSVENOR GARDENS, LONDON SW1W OBD 

Teh 01-828 7233/5699 Reuters Code: I GIN, IGIO 


WALL STREET 
Sept 2573/81 +25 

Dec 2596/2606 +25 



6 months 
8A 
8.1 


VALUE OF 
DOLLAR 


Tint) (o) (n) 
llnti (fi 


1/mJ (fi 

Pesu 

*LZ. Dollar 
Zloty Co) 
Escudo 
U.S. 9 


05842 

320.00 

55050 

79950 

1559 

3750 

2063 

16039 

28250 

M1A0 

1.00 


ReonfcM Isle deb . 

Romania 

Rwanda 


French Franc 
Leu (cl 
Fraac 


/Boliviano (o) 
IRnUvtMO (ft 


CREDIT CONDITIONS remained 
generally comfortable In London 
yesterday, but the male concern 
about interest rates was focused 
on the dollar and today’s US trade 
figures. 

In Frankfurt the ‘domestic day- 
to-day -credit situation was 
equally calm, with dealers seeing 
little prospector any early change 
In rates, unless there U a move by 
the US authorities to stem the 
dollar’s decline. The West Ger- 
man Bundesbank council met 


of£250m, bat revised this to £300m 
at noon. Total assistance of £155m 
was given. 

Before hroeh the authorities 
bought £50m bank bills outright in 
band 1 at VM per cent 
- The Bank of England did- not 
intervene, in the market in the 
afternoon, but provided late 
assistance of around filOSm. 

Bills maturing in official: hands, 
repayment of late assistance and a 
take-up of Treasury bills drained 
eiSOm, with Exchequer transae- 


Tbe fixing rates aril the arithmetic mean, rounded to the neereat oae- Mu m u i fe , ttf tae bM PM 
offered rates far SUfcn quoted by the market to tin reference banks at 1150 a/n. each traridng day. 
The banks are Nadaoai WwnWw Bmdg Bare Of Tokyo, ( tent sdie Bank, Bawme NaxiunMe de 
Party etui Morgan Guaranty Trust. 


Brazil 

Brunei 

Bulgaria 

Burkina Faso . 

Burma 

Burundi 


IBotMaao (0 
Ptda 

Cruzado (o) (5) 

Dollar 

Lev 

CfJL Fraac 

KyM 

Franc 


IMDa 

(MtanatU 

Iran 

Iraq 

Irish Rqmblic . 

Ureri 

Italy 


MONEY RATES 


NEW YORK 

(LUBCtrtfaW) &SSLI 

y— — Sk IhieemaiBi . 

EnknlsanK^ — BI.-8 Sxwdh — 

Fed. hath 1 — ■ 6% IfaejMr.-. 

MfmbalintenMioa — — Tnoyrer — 


iFoastny BfBs and Bonds 

5.75 Three year 

— ■ 655 Ftstrjear 

______ 655 Five yew 

6-70 Seven year 

... 7 54 10 |«r 

. 833 30 year 


SnhmM-U 


Ooe l Two. 1 Three \ Six Lomtaml 

Mnab 1 Uontfe 1 Months Maods teervemlon 


5503.95 | 
7V7% 


420-4 35 
8i-«A I 


' fl* ‘'I'W ■ 1C -u 


■ Til FT, 


credit policies unchanged. 


UK -clearing bank base 
lending rate lO per cent 
since August 7 


The July US trade figures are 
awaited with Some trepidation, 
however, after rumours of soma 
alarming 'deficit -figures in the 
region of^bn. Esfectations still 
point towards a- shortfall of 
around $16bn, but dealers fear 
that more bad figures on trade 
will lead to -a strong attack on the 
dollar. This, in turn miay be met 
with another rise in the US dis- 
count rate, leading -to upward 
pressure OP interest rates in. other 
major financial. Centres. 

The mood of uncertainty led tax 
slight rise in longer term London 
money market rates, r wW»: 
month funds rising .to JOWrUm. 
per cent from lOJi-lOVS per cent, 
but three-month money was 
unchanged at lOtt-lOMi per cent: 

The of Tfoiflanri initially 
forecast a money market shortage 


the note circulation fiSm. 

In Frankfort call money fell to 
3.65 per cent from 3-75 per cent as 
liquidity in the banking system 
remained high- Commercial banks 
held DMRL7bn in reserve hol- 
dings at the Bundesbank on Tues- 
day, raising the average for the 
first eight days of September to 
DM 59bn, against an expected 
required average of about 
DM 51bn- . 

la Paris the Bank of F rance left 
is money market intervention, rate 
at 7% per cent, when injecting a 
net FFr9.6bn Into the banking 
System via a two-tranche repurch- 



GmmkmiRb. .... 

Cam* 

Canary I statute _______ 

CapeVerte Islands 

Cayma Mauds ■ _____ 

Central Africa Rep. 

Chad 

Chile - 

CWhb - 

ratanfelj 

Comoros _________ 

Congo PMfde't Rep. al , 
-Costa Rita _______ 

Cotr d’Ivoire ______ 

Crea - 

Cypres 

(faednskwaida ______ 


C.FJL. Franc 
Dollar 

SoaBbh Peseta 

CwiUw 

Dollar 

C.FJL Franc 
CJJL Fraac 
Peso (o) 
Rtm ni rei Yuaa 
Paso <o) 

CJJL Franc 
CJJL Fmc 

Colon 

(LFJL Fraac 

Peso 

Pond* 

Koruna (o) 


Jordan 

Karapwdwa __ __ 
Kenya 

Kiribati ... — _ 
Korea (North) __ 

Korea (South) — 

Kuwait 

Laos Pies D Rep.. 
Lebanon ______ 

Lesotho 

Uherla 

Lfeya ; 

I ia i lal ■Wllaln 
UflPRCTOtCin —a — 

L m e iife o w g — — 


Krona 
Rupee 
Rupire 
Rial (a) 

Dinar 

Pont* 

New Shekel 
Lira 

Dollar (ol 

Yen 

Dinar 

RIM 

Sharing 

Australian Dollar 

Won 

Woo 


SL Christopher. — 

SL Helena — 

St. Luca 

SC Pierre 

SL Vlncant __________ 

Samoa (Western) 

Samoa (Ami 

San Marino 

S6o Tom* & Prindp DR 

Saudi Arabia 

Senegal . . 

Seychelles 

Sierra Leone ________ 

Singapore 

Sotocnan Islands 

Somali RepuWlc 

South Africa 


Maloti 

Dollar 

Dinar 

Swis Franc 
Larenfeoiag Franc 


Spain 

Spanish ports hi 
North Africa _ 
Sri Lanka - 


E, Caribbean S 
Pound* 

E. Caribbean S 
French Franc 
E. Caribbean S 
Tala 
US $ 

Italian Lira 

Dobra 

Rlyal 

C.FJL Franc 
Rupee 
Leone 
Dollar 
Dollar 
Shilling Id) 
/Rand (f) 

(Rand (c) 

Peseta 


2.70 

L6S95 

2.70 

5.999 

Z70 

23134 

LOO 

129955 

34.7903 

3.751 

299.95 

55622 

2250 

2-0882 

L9763 

132.60 

33333 

25231 

120.45 


Sudan RepebUc . 


u— 

MntagniT-r On fee 


Malawi 

Malaysia ____ 
Makflve hind! 
Wall Republic. 


Deomarie .... 

Djibouti Rep. of __ 
DootMea _______ 

Dominican Reprenc. 


E. Caribbean $ 
Peso 


6.9445 

177.721 

2.70 

339 


Martinhpie . 
Mauritania . 
Mawltius _ 


Pataca 

FrancCT) 

Portuguese Escado 

Kwatitt 
Ringgit 
RuRjma 
CJrJL Franc 
Lire* 

Franc 

Ouguiya 

Rupee 

PesotiD 


LONDON MONEY RATES 


Merbank ■ ■■■■■». 

SteritagCOs. 

Load Autb’rttjr Deps. . 


{fecoant Mki Daps. . 
Company Deposits - 


Ti easa ry BfflslBay) 
Bartt Bills (Buy) — 


ory paper. ThG central bank sup- 
plied a total of FFr 4&3bo, against 
maturities of FFr 36.7b n. 

In Amsterdam the Dutch Central 
Bank will hold a tender today for 
10 -day special advances at an 
unchanged 5.1 per cent, Dealers 
suggested the authorities. . are 
likely to increase the allocation 
from the. Fl 2.5bn in seven-day 
advances expiring today. 


DoRarCDt 

SOB Linked Deposits 
ECU Linked (toposK 


Over- 

7 ifays 


ai^d 

SOtiCY 


11-8% 

9ilj9i 

n 

9>z 

ft 

5 

10>r9% 

ft 

ft 

ft 

ft 

ft 

vrw 


ft 

— 

— 

% 

z 


1Q& 

7A5-7A0 

— 

- 

W& 

7A-7H 


f Sucre w 
LSuere (I) 


Three Six 
Mends Moods 


/Pound (o) (3) 
’ IPucnd (d> Ql 


JIAclOla 

10.V-1D 

10J* 

10 $ 

n 

10 s * 

W*e 

n 

9*] 

750-7.45 

M-M 

7A-7A 


lOtrlVk lOk-lOH 
IWi-IO 1 * 1£PHJD% 

10b UK 


EtSntritctor. 


Equutorfal Guinea . 
Ethiopia 


f Colon (bl 
1 1 Colon US) 


l Colon (d> 
CJFJL Fraac 
Birr (c) 


20950 
180 JO 
0.70 
236271 
WO 
■LOO 
299.95 

257 


10 — 

UP* — 

850-7.95 BJ5-8J0 

%% m I 


mum Mf one uhu wih« iiquwj 

9 7614 K.ECGD Fhted Rale Sterling Export F'mroc*. M ake up ifeor AnflU* 28, 1W7. Aj^eedi rates 
23 a October 25 1967, Scheme 1: 1L24 pi,5W«mB I & (11:1131 px. 
SEfor^rktd August la Augitafe, 19B7, Scheme IV; 10-037 px. LoraJAuttortty red 
Flnnnw Housed seven days? notice, others sewn days' fined. Finance Houses Base tett 30 per cere 
from Sw*en*er 1, B** toposlt Itees lor sums at sewn days' wUc * 3-Sfr _per cem. 

SJStoreorTw Tepadt (Se ri« 6);D eposft £300/00 and *«• 

nujM, ibamIis BL per cent; threg-ti* months 10lg per owe sw-«M mpimts per ant, wne- 

12 mantis 10% per eat; Under £100,000 B per cere from September 2, Deposits whhdraum for 
cash 5 per tent- 


Faeroe Istareb - 
FalUand Islands _____ 

FW 

Finland __________ 

France _______ 

French Q'ty ta Africa _ 
French Guiana _____ 

French Pariftc Islands . 
Gabon ________ 

GamWa _________ 

Germany (EasO 

Germany (West) 


Danish Krone 
Paond* 

Dolts' (M 

Markka 

Franc 

CJJL Franc 

Franc 

<LFJ>. Frswc 
C.FJL Franc 
Dalati 

Ostmark (01 
Deutsche Mark 
Cad 


6.9445 

15595 

121775 

4J555 

5.999 

299.95 

5.999 

109573 

299.95 

7.44 

1,7927 

17927 

16650 


Mjquelaa — 

Monaco — - 

Mongolia 

Montserrat 

Morocco ■ 
MozafflMqoe 

Namibia _______ 

Nauru Islands — — . 
Nepal ■ 

Netiterfands 

NefteriredsArefliB. 
New Zealand, 


f Pew tiD 
■ IPeso tel 
. F rench Fraac 
. French Franc 
. Tugrik (o) 

. E. Caribbean $ 

, Dirton 
. Metical 
, S. A. Rand 
. Australian Dollar 
. Rupee 
. Guilder 
. Guilder 
. Dollar 


Nicaragua . 


Niger Republic — 
Nigeria _______ 

Norway 

OmanSuhanateof. 

Pakistan 

Panama 


[Cordoba Col 
l Cordoba (tfl 
C.FA Frwic 
NahaftO 
Krone 
Mai 
Rupee 

Balboa - ■ 


299.95 

2.9155 

5.999 

7450 

13544 

151060 

5.999 

S999 

3-3555 

2.70 

JL24 

40450 

25231 

13729 

ZLQQ 

251® 

LTV 

1509 

90050 

7050 

219050 

299.95 

43212 

65905 

0385 

17.564 

150 


Surinam __ 
Swaziland — 
Sweden _____ 
Switzerland — 

Syria 

Taiwan _____ 
Tanzania ___ 

. TbaUand 

Togo Republic . 


Spanish Peseta 
Rupee 

{ Pound (o) 
Pound (k) 
Pound (0 
Guilder 
(.Haugen! 

Krona 
Front 
Pound (o) 


120.45 

29.783 

2JJS 

2.93 

450 

1.785 

25231 

6326 

1.4832 

3.923 


Trinidad & Tobago 

Tunisia 

Turkey ■ — — 

Turks & Caicos Islands 
Tuvalu ________ 


Dollar to) 

Shilling 

Baht 

CJJL Franc 

Pa'anga 

Dollar 

Dinar 

Uro 

USS 

Australian Dollar 


30.11 

68.139 

2558 

299.95 

13729 

350 

0.826 

902-25 

1.00 

13729 


Uganda 

United Arab Emirates . 

United Kingdom 

Uruguay 

USSR 

| Vanuatu 

Vatican 


Vietnam 

Virgin Minds (British). 

Virgin Islands (US) 

Yemen 

Yemen TOR — 

Yugoslavia 

Zaire Republic 

Zambia 

Zimbabwe ______ 


New Shilling (!) (41 
Dirtam 

Pound SterffngT 
Peso (m) 

Rouble 

Vatu 

Lira 

{ Bolivar (ol 
8aiivar ini 
Bolivar (d) 

Dong to> 

US S 

USS 

Rial 

Dinar 

Dinar 

Zaire 

Kwacha SZS 
Delta r 


59.85 

3573 

15595 

24150 

0529 

109.176 

129955 

1450 

750 

3550 

8050 

150 

150 

1050 

0543 

81157 

118537 

8.0257 

15697 


nx. Not available. (m) Market rate -IKS. dollais per Matiooai Currency ta) Parallel Rate. to) OffWaJ rate. (M FtoaWg Rate. (e> Commercial rate. 

<« FreemariteL (e) Controlled, to Ftoanctal tare, (gl Preferential rates, to) Nw eoanthd hgporto. (0 Floating tourist rate, fll Public TrensaeUonllate. 00 Agricultural 
produets. (I) Priority Rate. In) Essential Imports. <p! Exports. 03 Guinea Bbnu, 4 May 87s Pew devalued by vproa. 41%. (2> Zambia, 5 May 87; pegged to the 

Dollar. Q) Egypt, 12 Uay 87: Partial lunation of die Pound awnwnced. (4) UsgnriLj » M« 87: New ShUng heroduai equal to 100 Old ShllHnSi. (5) Brazil, 16 June 87: Cruzado 
devalued by appro*. 85796. (« FIS, 29 June 87; Dot far devalued by appro*. 17J996. (7) Madagascar, 29 June 87: Frans devalued by Appro*. 36%. 

For further htformaHea please coma poor toed braoeb of fee Bank of America. 








































































































& Financial Times Friday September 11 1987 .. 


WORLD MARKETS 



0 


FT- ACTUARIES WORLD INDICES 


Jointly compiled by the Financial Times, Goldman, Sachs & Co., and Wood Mackenzie & Co. 
Ltd., in conjunction with the Institute of Actuaries and the Faculty of Actuaries 


AUTHORISED 
UNIT TRUSTS 


ar »"=.- -S s totSS 

-.1204 USfe 

7LX 

Sfe«E=»| n 


F*CWt- 
4CJi Ul Exempt Fun*" 
♦E? Ftci^ iWwi 


Abbey Unt Tst h Jagri - (a) 
83 w u M«j* uf g M. B umuop bi H i 


•E? *» }W Ug 

«a« ?jb facem** - iogj lot 

*0.7; Oil facii lpinEn— -I1MJ Hi 

+aAf 0 23 F*eaan*i»nf— S5LJ sn 

•ai: am FACs*sac*aA«* — I som ® 

-at; 057 1>uAerts<d 

35 al* FS lu i uHMit Naugen L« 
.wi ■ IWWntSnwat^* „ 

S^Sf^izdii 2 


Exempt FnA 
.... 1 OS HWkhnne 

' -! in &££?*“ — 

rJ us 

220. Iminft, .-. 


NATIONAL AND 
REGIONAL MARKETS 


THURSDAY SEPTEMBER 10 1987 


WEDNESDAY SEPTEMBER 9 1987 


DOLLAR INDEX 


Figures In parentheses 
straw number of stocks 
per grouping 

Australia (93) 

Austria (16) 

Belgium (48) 

Canada (129) 

Denmark 139) 

France (121) 

West Germany (92) 

Hong Kong (45) 

Ireland (14) 

Italy (76) : 

Japan (458) 

Malaysia (36) 

■ Mexico (14) 

Netherland (37) ............ 

New Zealand (24) 

Norway (24) 

Singapore (27) 

South Africa (61) 

Spain (43) 

Sweden (33) 

Switzerland (53) 

United Kingdom 033)— 
USA (588) 


Europe (929J 

Pacific Basin (683) 

Euro- Pacific (1612) 

North America (717) 

Europe Ex. UK (5%) 

Pacific Ex. Japan (225)— 

World Ex. US (1816) 

World Ex. UK (2071) 

World Ex. So. Af. (2343). 
World Ex. Japan (1946)*. 


The World Index (2404). 


: — 




□ay's 


Local 

Gross 

US 

Pound 

Local 

Change 

Surfing 

Currency 

Drv. 

Dollar 

Starting 

Currency 

% 

Index 

Index 

Yield 

Index 

Index 

-Index 

-0.7 

15139 

153.70 

2.45 

169.18 

151.92 

154.04 

-0.7 

8009 

91.70 

227 

9839 

8836 

91.73 

-1.0 

11336 

116-94 

439 

12732 

11435 

11738 

-60£ 

12139 

12083 

232 

13339 

119.96 

127.73 

+0J 

106.42 

112.09 

235 

117.94 

105.91 

111.48 

+0JL 

103-63 

10099 

2.60 

11432 

10331 

10829 

+0.3 

92J3 

96.00 

1.98 

10146 

9131 

94.76 

+0.4 

13037 

14430 

230 

143.73 

12937 

143.90 

-1.4 

127.52 

135.08 

334 

14330 

12836 

13625 

+0-1 

7044 

85.05 

236 

86.97 

7830 

8433 

-1^ 

129.14 

129.06 

033 

14531 

130.75 

13028 

-03 

161.05 

17239 

235 

17920 

160.92 

173.05 

+45 

380.87 

70138 

0.43 

40424 

36300 

668-93 

+0.9 

113-89 

11720 

335 

12526 

112.48 

115.60 

-1.4 

116-82 

11137 

2.70 

131.48 

118.07 

11138 

+2 JD 

160-90 

16033 

1.71 

174.98 

15733 

156-75 

-0J5 

154.64 

165.24 

1.48 

172.45 

15436 

16532 

-OJ 

16637 

13432 

331 

18436 

166.00 

134.72 

-0.7 

14004 

245.00 

2.75 

253.76 

14236 

144.99 

+03 

117.98 

1233S 

139 

130.46 

11735 

12250 

+05 

9730 

10027 

1-67 

107-63 

9635 

9922 

-OJ 

137.05 

13735 

3.27 

15238 

13634 

13634 

+1.0 

116.74 

12932 

2£3 

ITfiZXi 

11537 

12825 

+OJ 

113.73 

11634 

2.84 

12631 

11324 

115.92 

-13 

13032 

130.41 

039 

146.46 

13152 

13134 

-0.9 

12336 

12437 

148 

13839 

12427 

12531 

+13 

116-98 

12931 

2.81 

12833 

115.42 

128-24 

+03 

99-26 

103-81 

2.47 

109.79 

9830 

102.92 

-0.4 

140.97 

147.17 

2.42 

157.04 

14132 

14721 

-0.9 

12431 

125.44 

153 

13839 

124.72 

12532 

-0.2 

119.66 

22634 

187 

132.99 

119.43 

125.92 

-0.2 

220.92 

127.06 

2.00 

13439 

120.66 

12633 

+0.6 

-02 

117.44 

12L21 

12621 

12735 

230 

101 

12932 

134.72 

11631 

120.97 

12524 

126.93 




* or Veto Scma^OrFd f - . ?5, iH3 35 oS FS t mutimnt Naugen Ltd 
■ U-* Tnttt Mgrut W 

(7345717373 P * B ™’ I ” 1 * “J 

la .(Ml -tst 0 SJ* Brawon F«i (OS 

"3|icS Bockna rter Ma agra^Cn Lid (aHgl 

3| 153 TltoStacAEWitonw.LreBreECZPaj 01-58S28M gggjp — Z3«r.y 

32 «.w m»«o>KSat — -73.9 Z5St .— HI jwBwYiwxTS— ZJ5.J 

aj ss ^j&v=sgf gf| n H gaarj^S jl 

23 ^ £S?s5s!r352£ in$ ~ BS w3 

% Jg SKSSWraBB iS* rJ £§ 

Bottw Unit Tract Mugnuit Ltd fm, Uw moo 04161. 

tt? SS gy^SluwEC3MSAL , m-XBOTZW ■*» "ffi ft— <MBH 

+0? 2* SortM&NAFI .49* Sii. _J IS* I ffir’ 

CCL unit Trusts United __ S^.'Sc.ssu)J_l|55B 


W1MW2 T .rWr-r rta 

uj in K cx u guu sums tn • 

u 2BWMmB4,iMeqsaa3ur . dtobuk 

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+m 05 t>caw» Dn um — lip . 

41 to HlgbtSffi IMt Trust IN— wt Unfed 

I 'g &ss akgasr^ss wb' 


onanu. 

I 0800 41* ESI 


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401 St Jota a. U—w ECiy «0E 

riiumM-Mirnmin IRO 142.71 
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* 

H^rUM. 872, 

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(AotTlKS -^J MB-? 


^ CCL Unit Trusts Limited tZ'SuMU— 

saasariaft4 l * , "a ssstts*™: 

is. CS Fund Ma — g er s Uruttxd^ Fjr€xai«Tmi)_ 


Ukixuim. IWtSJ 

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lunwOM 
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o? SJC c; i.«7vTft1 '9' «sl +L2I OT* SWWC»w*t*lrT*_ 9U 

(LID .Sfe* 853 -A* 177 CfMlttTadl — . 1308 1 

£a L4fa : i.ni. HCJS -0 a o« JaanSftM* Steal— tA5 i 

Fd— J4B4 4tEa +0* i«5 AwSSfaJ— !_I?160.7 I. 

Ia^ 1? Canada Life Of* Trust Mngrs. Ltd !£?Sc!£t£.Ui UU 13b 

ts i« asserts® 1 ^ ‘§1^2 ^ 

toS uS 379 Robert Ftami— A Co Ltd 

-L2: gTS y- trc - — - 1 gS fl 3» 2SCeoton M.Lnta EOT 7UR 

S5 S3t*F=ile.Tns: >3*J JZU -OS — *»&«*» »9l___r«ir?.B7 O- 

-LJ ?? P— . Fgntf IW CoXExnxWW 137B5 .141 

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¥U Samuel ttaft T*L Mgrot MU 
HLA Toner M— i she Nud, CraMoaUl-fiBb iSSS 

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_-... *02. 01* up- a? 794 4161 OX IMom-UBtol 

mSSS — «7n‘ +2i v2 U* tower 8me '«6 472 — I am 

UMM 1** 4 +**■ 223 Capef (James) KogL Ltd 

ABteHhmbarUuft Trusts PLC(aX8) Wf«8 EgE 

S«d OwXnr Ceetm. kM6 SKI 1EL Sai ta3 xS Ua-n.Umsl 

DMtWS (07431 6UD66 N^XeKR3=U»J^jSlS S.U +4» lS 

iKL2 14211 *tu £49 Cap&al House Unit Trust Mngrs FamM 

i&f H ^ ^ S3 «;h*»«. Fesmu Soon; BSMmgb. 

«s a s • - sr , T !s sssr 

ss *«| B ^S3 ss 3*“ 

2D4£ 21*5j +01, 1® UKfirmuTn 12S5 33 +53 £08 SgHf 

■* CuL Bi. at Fla. at Ctrarcb of E— taod# SmSyrr™ 

75Sl +a* 099 JPwtMn.tmteFGrrua Q1-5B8 1A15 ttaom.lMU 


-o*! ££ Fn u u H ng t on Group (a) 
Hi 3 Loafer WSflBMffw EC2M5NQ 

n42 Amr.lfiN — 

tSj JS Uceom. Ootal 
+52 058 8*-Tnno»d_ 
jfci osi Uotn Until 
1 650 


Bate rates: Dee 31, 1486 > 100 

Copyright, The FlnaneUl Times, GoWnuuw Saste A Cfc, Wood Naekende 4 Co. LuL 1987 


+06 009 

(UM&FdlM! 

*■« (MMSbVkMTtt 
. (kUnaaeTmn 
■“ tm WWltten 

-4L2 m nsje assi? 

/T , tel SrtarJtjTnnt 

H Hi tws«mi»eteTB. 

_ C6i5re.Sts.rB ! 

■rtfl ois ‘SMSSm— rCoC— JZM 

+ || H IBI F—d Managers Ud (a) . 

3b QueenS^ London, EC4R1BN _, 01-236 <SS 

wmwim 1x725 xmd. -xa ui 

aee^^ss isl S & 

.LTJ ||S <NCraHfeTBl— Ja«.7 «7t -S3 24B 

Key Fund M u g irr Ltd (aXg) 

35 FA— Si.Us^irBerlC22AF 00016(774 

n-bBsm 1S&M2— 12-? ’Krf iHlSS 


4 WI 2 W ■.- . 

Tjj - Stsih&ruedbB 

♦i-5 iferMipurimW. 

Z KteteSlW 

*L! LJ9 F*r AM Unl it* * * » S m* s U 4 UX M 

+U 149 " 

420 

+01 «£D LAS Unit Trust Ma—tn Ltd 

077 43 George St, CdnbondiE4<23JL _ 031-2254908 

+2i LAS M. GranthTU <87 3ud +«7 0« 

"MS HS LASrrefcClhTB 77.4 8243 UL 

rS-3 LASN. AmenmoEBdp. 3L8 -iS4 _ 

IS re vjw* — S3 +gi 1» 

rM HJ usewSs 


LAS Eon lac 
— LASFa-U*. 


BASE LENDING RATES 


+00) 0« 2 Fere Street. D—mECZYSAQ 


No, 87 

Feb 88 

May 88 

34 

1030 

46 

23 


— 

17 

fa 

129 

1530 

30 

2050 

17 

3J0B 


— 


— 






rere 

15 

620 

10 

4.50 

15 

8 




11 

1230 




15 

18 


45 

430 


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i _ 

20 

0.70 





j 

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630A 




1 — 

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r~=n 



1 

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330 


1 ~ 1 - 

60 

13 JO 

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r^-r: — 

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— 

158 

3.70 

59 

4-60 

10 

5.40 

1108 

080 

83 

2 

10 

3 





i 13 


q 

1.40 

302 

0.95 

96 

130 

15 

230 

205 

2 60 

70b 

330 

10 

530 

35 

630 

1 12 

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Or 

C 87 

M«ft88 | 

1 June 88 




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830 

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12 

10 

17 

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68 

6.90 

55 

780 

42 

330 

12 

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16 

530 

12 

2 

2 

320 

2 

4 

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20 

280 

55 

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1 






tore. 

7 

330 

10 

550 

11 

330 

10 

! 5.70 




2b 

6.40 

20 

8.40 

— 

— 



% 


% 



UNBuk 

10 

• Ckzriffton Baft 

10 

KdBLoiKont 

10 

MwiCoapaqr 

10 

CftMrMA 

10 

■KRte—ular 

10 

ASied AratoSk Lrrl 

10 

City Uerdufts Baft — 

10 

NcrttereflartUd 

10 

AfiedDDdw&Co 

10 

OyfcsdaftBuHc 

10 

NoniKkGeiTnsl 

10 

AfiedlrMBut 

10 

Cown.BLH.Eaa 

10 

.PKFMfflS-ldllUIO 

lV; 

AnericasExp.fi 

10 

ConUdatedCeed 

10 

PranraHmaLld 

11 


10 

Co-operstirt Sari 

*10- 

R. Rated & Sow _>~ 

10 

Hesqrtatacfcr 

10 

Cyprus Pomdar 96 

10 

Sccdwp! Crastff 

IP; 

A HZ Bankieg Gmg 

10 

DnosUirt 

10 

Royal fiol Sendai 

10 

tactile bp Carp - 

10 

EqMI'r'l TstC'ppIc 

10 

ByiTraira 

10 

AodMritr&Calri 

10 

EtttffTndUd. 

10>2 

SexttSWifewSec- 

ID 

fiMfcB— 8 

10 

Fxauii 6G(i. Sec — 

10 

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ID 

B»*Huxafca 

10 

Fira tat Fa. Carp __ 

11 

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10' 

flask Lecad (UK) 

10 

RnlHd.Sec.Ud 

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us? u 1S £■; es aasa"* ^ ss I His sr. 

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WBrtdwdt teVaiTg 1 3011 3L9nt -_J J8 33fG»9WJB8mStiML EC4R4AS . 01-63B5678 Friends Pruts 

M«2 36A.d +M fX gS2SSt==j 38T ^5 ^ 

^ i| IS SSESStd “5 ! + _9 2% g-.8gflr— ■ 

fai rtj. L9Z Charities OffidM I wrest Faud« F.p. Fo*d wota. 

1413 150 s +L7 LJ9 2 Fere Sreet. Hate 6C2Y SAQ , 01-58B1B15 ?®„^SS=nS 

aO£ 271» +lri 13 hco*e Aa;31 I SOUS ,_J £47 F-f- ar-a BUg 0 


.5 I ft f nnil Trait Mingn— nT ltd 

Pbiq'Hoasr, CopttaDA«oEC2R7BE' 01-5882800 

OH ISClreFmd WSJ 71XM — I 339 

054 L4CIae«Cern— ZJ345.9 fflS _.J LJ4 


— j wSririTy 1 ^ 01-44332U iMrentNn Unit Tst Mngmt Ltd 

^ 20S-9) ^ U0 lbte Wa. , Sa«. |L^r 

01-6385678 Friends Praririot Uait TrastsfaXhXcXz) jjaji— =^8b* 

12 Came Street. Salatraj, Whs, Tet 0722 3362(2 17t * 7sfc " 


J**2 364.3 

46.9 *9J| 

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«Z6 310201 

1255 D3« 

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2J9 £P..eed*BN. 


SS M i £M£=i SS. t « 

3<s.<tes +ls is Qmt m— n Ltd 

Z1S5 1 +35j 326 PO Bai 1L Cofetnai Si Umtan EC! 01-7267709 

2935 31LS) -S3 024 S&CSbkWI JB3J 6M _. J 057 

4417 46821 -ns 152 Naum Be»t««F*£4a2 S3 __J — 

377J ]WS +£» 096 SS— —Z/ZSJ 29.3 1 - 

^ . Oericat Mnfleaf Unit Trust Managers Ltd 

Anthony Wirier Unit Ttf. Mgn*. Ltd Rmnw pub. B rtnri8S2(UH 0800)373343 

19 Wide?— St Loadon □ 7HP (B-3771010 u**tnbax*— - 257 2721 +02j OO 

:H §| S°. 7tS| "S3 5S 

BUrOmifTSFdriJran 752ha 1 U IxwWt E5 V* -Oil 03 


F.F. Paofk Baste — I 


£06 Lazard Bra there & Ca Ltd 
.^S 21 Woafiett, Lom*JoEC2P2Hr 
•850 j* id* 

0.99 
099 

022 SmdCrifimh 


Ex-TB. 

FrCBh.11 
a— mr, 
U5A.E4.TB. 


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=3 - aBasftsastf *»* n ^ 

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no G. A A. Trust (a) (g) £5555,^3^ 

L| 4 Mgr uB, Crrea+X, Er^ Ttarrgh. tmigB34g . Mom Wot Jto(12 -ZZZJ23B.9 


1 J •! 
^ ^ | 


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takolCjpB 10 

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BMoflaSi 10 


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RsbeilFnarLPK 11 

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Gradies Barft 10 


B— k Beige US- 

BjrdajiBa* 

Bead— ATaUd. 


HFCTnst&Smgs 10 


• HadreBaok. 


UmedBkoiKirnan 10 

(MedUunhSok 10 

lUljTnaPLC 10 

WtfleixTrEt— 10 

WestpxBMC— 10 

WMamrLwfiai 1&2 

VgrisWtBM 10 


Arkwright 
IK— St. *h 


<&Fifl.aCiDM£ '302 

ICFrltahs ,240 


ssraatv 


- n laaoGrarei 

J 4.91 Praqc+rCns 


i Ok ,240 

hranr -I265 
. 142.9 


Asset Unit That Mogrs Ltd 
PIVui Hw, FMdmth SL Uodoo EE3 

KSKSSSLdS! 


HertsWeiGea-Ta. 10 


Bmtoi Trust Ud 11 


ABN C 
ABN P 
AECW C 
AHOLD P 
AKZOC 
A ICO P 
AMEV C 
ANEW P 
AMRO C 
AMRO P 
ELSEVIER C 
ELSEVIER P 
CIST-6 RQC.C 
CIST-BROC. P 
HEINEXEN.C 
HEINEKEN P 
HOOCOVENS C 
H DOG OVENS P 
KIM C 
Kill P 
NED LLOYD C 


NEDLLOYO P 
NAT. NED. C 
NAT NED P 
PHILIPS C 
PHILIPS P 
ROYAL DUTCH C 
WrAL DUTCH P 
ROBECO P 
UNILEVER C 
UNILEVER P 



Oct. 87 

Jan. 88 

Apr- 88 


FI.48 

752 

2.40 

46 

5 



FI.49J0 

FI 30 

583 

130 

17 

290 

109 

3-30 

F1.100 

15 

030 

6/ 

240 



FI8780 

FI.I00 

54 

280 

3 

Hi 




FU01 

Fuao 

1250 

3-70 

534 

36 

1250 

FIJ7250 

F1.160 

429 

1.70 

157 

420 

7 

fa 

n.?D 

51 

030 

20 

130 

17 

270 

FL6130 

FI 30 

3 

L40 

243 

280 




F1.80 

U7 

680 

2 

9.70 





Fl.85.90 

FI85 

36 

180 

261 

330B 

5 

480 

F130 

453 

5J0 

9 

8.800 

2 

10.70 

FI3330 

FI 34 

104 

030 

— 




R36 

117 

130 

663 

320 

95 

430- 

FI. 4830 

FI 30 

122 

230 

■ 15 

4 



FU90 

154 

3 

77 

820B 


. 

FL1793Q 

FI370 

103 

220A 

9 

480 

— 

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-re* 


n.45 

179 

080 

90 

2508 

5 

330 


FI 35 

434 

130 

220 

330 

6 

530 

FL5230 

F135 

215 

330 

13 

5 

4 

580 


RJ90 

226 

530 

40 

14 



FUB250 

nj70 

50 

290 

10 

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n.75 

382 

270 

70 

5.70 

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FI.70 

105 

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FI55 

477 

1 

224 

2.40 

30 

330 

FI3L70 

FI 35 

237 

410 

96 

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17 

630 

FI 270 

1261 

480 

391 

120 

22 

18 

FI 264 30 

fIJSO 

950 

290A 

233 

6 

15 

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10 

230 

13 

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n. 10930 

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nj36 

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liidmdSM 

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faptrUd ■ 10 


itaxSCrtdtCap.lid_ 10 


• Mem ben ri the Aaepttog 
Moujo CormtoBee. * 7-da r 
deposits S%. Saaewhe 756%. 
Top Tier— £2,500+ a 3 cnomta' 
notice 931%. At cell wfaea 
C1050Q+ i e mai l s deposited. 
4 Mortgage base rate, f Demand 
deposit 4.98%- Mortage 105%. 


Atlanta Unit Managers Ltd 
Lloyds Wharf, 2 MB SL Lamm SO 280 01 

Jm- Far Ear- KTL7 ldM - 

Atom, hod 1132 

JUrmUM 1475 

HilmtFi-B-r U&* 

AUmuFdsiTB ,1+5 + 

AcmaUdH — — 2S5 

ABMlINCCmset 313 

AUxaktoABLM. 605 

t*MU Mb Ued S3 487 


SxdalSUt J4fa5 49 

CofBBercial IHn i Trust Ma 
m -220 7231 s. HeUsrt, 1 Ihriarshaft. EC3P 3DQ 
— J am one 

— J 147 CUCICAfitseU (663 

DoJka*. 1663 

CU Imune — J673 


« GT (Ml Managen Ltd 

44 ff so, Lon don EC2M 4YJ _ 

oo 01-2832575 DenHitt 01-626 W1 ihaeriM 

U CaMaKInc) — J15X2 lUteT +M 1-9 FwUar. 

15 Canal Otei— | za* +53 lj armnamsmt? 

U13 U&M +53 50 EwtmmStptT 

2717 2103x5 rt3u.hr 


:rj 8 


Bafflic safford A Co Ltd 
3GMlslreSi.Edhtogh 

hnEcS«flt2 1525 4 54+d 

JasEa*VlSfe9 5123 5312 

UKEataotAtoZS 4141 rei.5 

ui aifiimAra- u«» 

FBI— lli41SmtI5— S7£l 605.^ 

rion— ir Trr'l 3542 3763 

Ktoro— _1." iSi mSa 

SGTrtoMOfr 722.4 23671 

BGC— «r — 237.4 2S6j 

K—rirnd 307.9 3Z75ad 

BCEsnpe 1211 133 lj 

■BC— AGtatnl 78.9 K5ad 

nSMTlffiGmsO J<93 XjJ 


21415 UoArzsB 680 72.0 +fljl 250 

H &££ —*?'■ Si S3 

ns Cu&a«ii?oIU «.4 Sl3 +53 050 

Bottom l ena 5L5 +CJj 050 

lb C oufedereSu u Funds Gtagt Ltd (a) 

^5 S0aaxerrl£K.WC2AlHE 01-438(050 

%B£sEeM\ U 3 8 

Era— Emsa (537 S3 +4J| £7 

ItollA TM<e« 31 T 5*3 _Tj U 

>6066 laurdSoMtifm -1503 5Z-Xl 43 22 

I 059 ComWB UnR Trust Item Ltd 

03 MJh.lV.IMto»i(MAinUR 017^841.11 


Dealing (H-686 

IIS + ft — irt 

Sj I in taesem sprcUl 

a j un ah 6 (moI. 

3 . I 250 Fir East md Sen. 


mjp 
Mari Aa, 25 J 12534 


••■— 1 £1 
-J 02 

1 A 

-4 “ 


250 Emilie. 

0.97 r— i 
0.97 an an— Fd 
(Lao World WMtSpaeSte 

“® Gartraare Fuad Manage** (a) (eXfl) 


2 S Mary Ase. London CC3ASBP 
ED Deutogcrer 01-623 57660BO6 

32 AawnetoTrsBtXl 86.9 

£| AstoaPanTnetb) 395 

L9 MaTattonl 915 9 

£7 Db-COWJ 777 B 

L3 OtoxB— tWSmHTa_ 29J 

22 ConthStot 106.6 

EraemWld 585 

L,t EmaNcoae 721 


+0-3 ft? fe 

♦fta 0.7 , 

+0 (15 • 

tif QJ Legal A General (lMt Tst, MngnJ Ltd 
-05 OJ Adndn: 5 RayWtU Rnft Hutun. Sremwood Eaex 

*}M J? Eamtoo DZ77 2Z7300 Dolsg 0277 263B10 

J3 Etort) DU 3695 3945 +15| LU 

■tft* I" Era to J 3969 6»SS +l3 LM 

. EiarftrMcarw — 896 95JS +o3 25« 

f - • Eorgnces S3 SUM ( 055 


sic 

■1.4} 070 ta»BmoTrwt„ 

-OH 050 laeanrjc Tnrn 

+5JI 150 MnaedlM— 
+oij 150 Natural MM*— 
♦aU 1.42 North anrnfem- 


040 0MSI«1 S ^S(U) ££) 

i - JsSSlS 5Hi if n*ainT* 373 

•^1 - HS? E-S toil 25 ^“eWoTO 514 

-£H OOO reapaaiacAAm — — j reu xfj* +aa — oomm+kbui 2073 

T3 aoo County Unit Trust Managers GmsmeTnatui . — 302 

+ff2 aw Ul OMmade, L— Ire EC2V 6EU J 01726 1499 ft4galA— rtcanfa)— 405 

tmatx ■■■ ■>-— 186 62 &d< +03 L82 

-03 390 firnwai Crt— ™ IW 8L2 16® -0.4 dBO Ho<f Knag Tfv* Ul 49.7 

+SS 063 Sg "" ~ ^4 2723 +oj 3S MwFtoO U93 

-ftlj 274.4 290 fij +Ot 1« to dF^ HtTB 

ras 74^ “ SraSraefirei- »OS - 


Bribe Trust Managers LM 
20 auwri SL Lr y idnA. ECl Y <TY . 


Successful results from 
new acquisitions offset by 
downturn in hand-knitting. 



+03 X63 
+lS a« 
+LU 053 
♦0 A UB 


Great BretahDn 920.4 'W 

♦flome ACraa <HT*^_ 6L9 655n 

01-3746801 hriSmnjTa UP3 1961 

JdTi; MnC»«rthT« SLS 2U>Jjt 

T£a rg N»Bi *rnGm»TjU 125J. 1331 

njn »— Ur P A — I I 4145 408.7U 

3— hEaSAXa 1008 1063 

T n?T SoroilSclAcrJ J4770 5048 

435 Crown (fait Trust Services Ltd 
AZ1 Croon Hose, Woldng 6(121 1XW 


9ig Irab 


TOTAL VOLUME IN CONTRACTS: 47.090 
A=Ask B>BU C=CaU P=Put 


FT CROSSWORD PUZZLE NO. 6,427 


6RIFFIN 



^Disappointing results from hand-knitting 
division, reflecting worldwide reduction in 
sales of yams and de-stocking by retail trade. 

SK Excellent results achieved by Burmatex 
and Eversure, with further increases in sales 
and profits anticipated. 

SfcNew ranges of all three divisions launched 
successfully, and recovery in knitting sales 

• expected over next two years. 

SK Final dividend maintained at 3.5p. 


Barclays Uateurn LtriUXcXB) 
Ltotam Ho. 2S2 Ratoted RA E7 

Uric — A— no %9 

DolAulAo. 3052 

(to.AuB.toc 347 

Oc xCral S-9 

[to. Em Gwfv Aec. aoj 

DatjmCiiOLlBC 795 

U— EaarecIM. — 6255 

(to. Etonian 1108 

Dd-Ftontol 532 

Da.500 «5J 

Do. Ccscrto 2026 

Do-tar&FtoLha-lB.. 517 

DaCrw—Acc 2*73 

Do-tamneT* 4761 

Da tad war T o *5 

Dotoc* BAbuTflAiE. 2131 

DoJO* AGO TO He- 2106 

DaLi— eTBld 117.9 

DBUn—ry 3145 

OaSrtrCO) JoAa — 1X7 

Do. S mt* CoiTs Ik 507. 53 . 

D0.5ptatoSte.Tii 2*35 257 

Oo-TVariFoto 1520 

DolM.T«f*Ace 661 

Do UB, Taste 635 

Do. WtortdeTnol 1608 

Btn .to.F4An- *67.4 

*wi.ni+ . Ite+a 


OIQ CnwoEaeoiTB— 1348 1*8.71 

♦ft* OotoCnMUTroi 3ZU 34LsJ 

Cram Hip* l*c.Tnto__ 3835 *0801 4 

Cnanhnl TecbTn 138.7 1473 h 

01-5345544 Cnare 30>itot Tn — JZW) 217JI i 

+l| 108 Cn iu d ei Daft Trust Kungm Lift 

M ^ i2ri «; 


ZJ7 raoTtoorW— 1311 

23 KB3SBS|R 

TJC SomtoSteT H . : 1675 

LIB- IKteC*.toLTndJl44J 

Global Asset 
103 SAM SttoDogl 
0-2* 12 St Janes's Ptoc*, 

£» CAUCAlpdte 
CAAILA IMiAoc 
H433 ““UKSKWalte 


_ 6AAI N. Arena to — 1510 

... AM* F*r Can l*c 1*30 

jjj 6W4F»L«to 1430 

_ GAMPtnACWYtek, JQ55 

Z ftAMPre&a*urlM— J23BJ 


-01 025 UKSmrttoSte ' 1 110.4 117.4 +53 085 

+0.1 356 

^ °jg UariuB MriRtatnOn LM 

+02 030 20 COpM Aw. London EC2R7JS 01-6007595 

+<U on Lto Wm rtAdca Jz852 atari __J D37 

+01 0*0 Leo Ana— J34B7 JUJl .Jj 057 

0 • • 

fj “Eft 

+ci *re Lhqnls 8k. Urit Tst Mugre. Ud (a) 

. 4a^vEiaB£3==:B II 


.1 .* 3i( 


f 9940. 
0-97 
0.97. 
03* 
03*. 
LET 
183 


UKSitortkAte. 
?-£ VK6rtreB.0«- 


London EC3 SOT ' 01^21] 

‘.sudis an 3 


f HMA S*«bri* Unit Trust Mi— — rs 
i2Z 9-17Pern«B*niRd,Haw«risH*— 
222 MnEinreM. 2*0 252 

301 grera rare (ram. 17*5 i«M 

301 S"*". 1 *-: 2113 2261 

Tn.Tt.rf MwMtlK — HJ Z73r* 

GredBto N Aw Graft J 278 2ui 


Summary of Results 



Year ended 30th June 

1987 

1986 

£'000 

£’000 

Turnover 

48,694 

38,735 

Profit before tax 

6,037 

10,262" 

Earnings per Share 

7.31p 

13.72p 

Dividends per Share 

5.15p 

5.15p 


Ccpies of tfw Annual Rejxrrt aiuilabU, 
from 28th September 1987. from The Secrctury 

Sirdar PLC 

Flanshaw Lane, Alverthorpe, Wakefield WF2 9ND 


+iri job Crusader Uaft Trust Maaagcn Ltd Gorett (Jofea) Urit MugL UK 

31 « 7201 

^ !S SK2Si&=S SJ ::z kS SSJSS5S 

+ftj WARnctofartl 470 501 +03 LOO Bona GdU A MB 

1 g M m is ss- 

♦SfilS Barttagtuu Orrit Trust MagL LM 

« a ?^£ssvM^ 3AB 9lti "“ra SS 

^ Jgg OiBCBsfoari Trust Mmgeacnt LM Eabk*a«+s«*]o 

Soo l Albeowto SL Ltorton W1X 3HF 01-4995733 SSKriftS 

+QJ QM UK SnteOrareoTnJ 15772 1693ri I MS E**ra»n &»«**« J 

^ g 9sSBZSSSr m ~mm P m ."K^OEST 1 “• 

a i s£Sknr=$£i aa “as assaswlf sa 

*0.9 ooo Drummed F— d Mangt Ud , l-a 

+0.9 ooo an cwdanAmw, iran, EC2R7PA.Q1-5B0 6064. wraam uon Trust re— aom 

s as m S^g& i aer hHw, k 3 { 

^ sse^sS^i SI =j is J§ 

Baring F— dMauagere LW Orawadl Unit Tn— M—cnifUt limited oSraStowrai - zt\ ^3 

PO to 156, Bertram Kere8R3«0 10-658900 5*51 j^nesSL LondooSWlAUT 01-4996388 

00 g » reri ! 6— a CMFd.jig&6 Ug* -lV lx Grafumf Mangers Limited 

£V ja S3 T id IS Ptorere HU 8W AreUgFray EC2W 

Si7 03 g— F** 1 . 6 ?^ Sa tnfl LCT fifradrarrarnK. 978 

tfc3 703 I 30 H ireri rS Srtl.nd*.rereireT»— 878 

«+, sh= ,k s i a ssaHs^ss 1 ® ^ a s? 

+05 02 Cn»bM»Ta — 1730 Ul| -3 03 Rp)ol Etoitoope, Lflndo* EC3V 3L5 

..._ 02 FwteTrtoKzJ 2830 30L9 +lol 01 Eraere ' ■ 2888 305.4 

+06 LI tear Tree 1*25 152J1 +0S *1 UlRsd 1125 1169to* 

18 Ja»S«torCOTntiL_ 1^.00 20OH _.7| DO OroMkEra 3024 32011 

SSaar t creT »U1- 14000 i+9og +Lii da 374.? 3 bba3 

U,n htoitire TiuWs tal EatotTrBC__ — J104O 1»3 40 Mftrariap.. 1663 17331 

ac Amre Unft Tost Mnguwt Ud 

ID Feactordi Street LondH EO 01-6B800D 6DB»9B*JJrefclx«d9B£C2«MVE 01-621 010L sSJanTL , IjtAJ 3845 

QraSb« 014)26 0181 

D uttfCrra (6L9 +«8) L17 BuBd M ra gMi e wt Lireftad 

iOf-M +Ori 400 frcte'&tra -—; — «2 ^ ^ 3, Undtorj Srare, Laetono EC2A 1RT ' 

ll GSEil a * H hms= 3«» tn 

asMK^ss H § is t III aBSSS L^gg,- 

I ai B saaajsaasr “ -3 

jAi iS rhi r«inwi 29B n-n -oji i+n urthbl^. 

nr 1 5c EFIiCmfhAkacFd^. 2CI? 21bA*4 +OJ1 2JB9 Hra *fr1 r— 1 119A0 

5j L§ FF»lKSiS«-Fi St 9 ^9rt +oJ 356 Tm*!* B» Si*. WsMJ 288.70 

J zS EFMl««*HFtoto 2412 Jfcj-0 +53 08b Tera B> UAtad J 17559 18984) 

jm yy% £Fhfi«Duaira — — ^ -7T 

^ r+7 EFll P*C2B Fnto 3*3 36S +05l 068 S ViK** US CrWBA — 1 773 



— j — toUod 
__J - N-AatoncreAte. 

— J — Do-UamJ 
PoMCBuhi 
DaCAara. 
London SQ raACteARogr. 


Do ( Arr reres 1 

£07 KSSS; 

g 5 ftSSK 

0^4 Do. [AcawU 


ftg Lucri AuBwriUaC Mutual IncsL T»t* 

045 gftres ueri. London ^CZYSAH . 01-5881815 

Do MWhcfflga 45.40 I ZJU80 


Lmd— A Ma—testa r (Tst Mgmt) Ltd 
WMMe Park, Ereterp« IDS ^ 03*0 Z 


racniTrea 

tettotTnre 


JMRlkwi 

TnSiX Ibv Ti 





CroreAAteni 

racSe*c>toTa 
ran Sane Ta_ |UU 

FMtoFTM im_i 

FlrtlNitk AnwteTa— S3* 
Fk* Stete Cto T«_ZI 1220 


Royal Ex, unit Mgrs. Ltd (aXz) 


j ax a 

*M «* 6 Grra (yXcKD 

°W«S17 

+Lft toertOM ScXb^TZj 573 

+3 s 
a 

•La 019 Uccniw _[40u 

u. .Lu . Cn ireoite Cmdi IM93 


9903 &wtolto* 

085 
950 
L36 

,5 EwiYiiid 

OOO Itoaltou* 
077 ritto to- 
(l in (Aco*nUend_ 
Fnlolln. T«L 
CAcare-UtotU 
mm ten*-- ■ 

^ Utoan-Urefl 


(topHal Era* Freds 
ranaaS-arCoaFoi 


nai EFM Arenas Fbi 

JS EFMCteBlFa. 

EFliEosM— 


Jill us EFMbwdiAteh 

q a SSSSSSi 

4 ^ gSgSTSS*- 

^3 137 EFWStertoBCire- 


ACBOSS 

1 Very powerful light may dis- 
turb (8) 

5 Protect student thrown out- 
side (6) 

9 Prison doctor tries case (8) 

10 Criticises strikes (6) 

11 Plea for lunch, perhaps, in 
the lobby (8) 

12 Stable person lost roughly a 
sovereign (6i 

14 Tactful pickpocket to claim 
being crooked (10) 

18 Being unruly, deduce aunt is 
ignorant (10) 

22 Ditch fish outside back door 
( 6 ; 

23 Domestic lantern I assem- 
bled (8) 

24 Service manual? (6) 

25 Row about weekend one 
finds remarkable (8) 

28 Flush with coloured end, 
perhaps (6) 

27 False claim for cash about 50 
per cent return (8) 

DOWN 

1 One using what Fletcher 
makes? (6) 

3 Silent around home time (6) 

2 Enquire within to obtain 
sealing device (6) 

4 Teach Rita about a number 
of actors (10) 

6 Good-looking Liberal (8) 


7 Develop plastic laces by tea- 
break (8) 

8 Boy stands up girl— shame! 

(8j 

13 Current producer to change 
a torn dress (10) 

15 Order un usua { cruets for out- 
side buyer (8) 

16 Empty dormobile stopped 
dead (8) 

17 Buy tea in a brass container 

( 8 ) 

19 Stop rebuilding side street 
( 6 ) 

20 Asian in pub needs help 
standing (6i 

21 Learner shivering after par- 
king trouble (6) 


National 
Westminster 
Bank PLC 


52 on KW.TgiS 
^ 82 KSSTsSE 


M Court Fired Magi PLC 
li Btotetow Street Lrare EC2U ZUL 
FarEMar* __JSW8 M7fl 


BSW5»Vtii SSSSEQg£ 
9»J* d S g K^STB"! 


ft» dHS3 m3 

^ K3 •UMW" 

aw Eagle Star Uaft Mngrs LM 

Batfi Bred, CMteritom SL53 7LQ ’ 

a" ffissassfisr iS5 S3 

Kas ¥ s S z =B' 

S saBscaasw « 

Enterprise Freri M— «r» Ltd 
9 Oraec Street UMS.LS12HA. 



» SH 4J SS 

“ ^■^'SSSSTai 6ss> 

-ft? -®0 fAcaw. urtb) 

53 7 -uj 5Qa '-trmrfiit 

»-4 +OOJ 800 Umnw 

J-3 i-?? i««rareite 

^7j -+& o^ fflSSraS_ 

I7S54 223 £3 S 5^25"’ 

IN 9 1292k Mri 438 reSB 

_ 775 BOSM +l3 0.71 UcoKIhM 

- Hrenhra Geredi Paud Mragen Ud (a) 
i 73 Sfi^yWtSl H,HDa * Sri«K Era raafareo 

oik Eng*te 0277 227300 DraAns 0277 261010 jraf*- Urtlfl 

ss ® SS 


ftotm, SrerewooL Essex 
Oaaga0277 


?2 ireraaOgnTreaJ 
S-S Jam* are Far Cte. I 
Ww Arei miTrat 


Solution to Puzzle No. 6,428 


Qnasnuaaa arananH 
ti !U n □ aan 
□EHDHHEaHH cinnaiDH 
Hnninnaag] 

HnaatoEBBa rnumaa 
3 H n n 3 n n 
anas naasnaa 

§r-.i« Q □ a H 

amnnaaa anatn • 

3 0 0.00 ci H 
saauHti uamoiaaiaHa 
an 3 a m h a a 
Hannas antDnaHsa 

3 0 0 H □ H g 
aBaaaa BOHnamam 


NatWest announces that 
with effect from Wednesday, 
16 th September, 198? 
its Branch Standard Rate 
is increased from 
24% to 25% p.a. 


06123^5685 



_ ffto*re JSrei9. 

0 irezateUanl. 

*33 raremtseoa 
021 N**HbSu7 

3 70 

«S JJGM Unit Maaagarg Ud 
SS 8215— mw-RAifia. 



y i 


081 H1MI»- ' 
0.42 (AcarelHhl 
a«3 UKbraCl 
077 UaouXU 


Brewio DaMHa Urit Trt Mogr* Ltd 

scmsrerSUraretnAwe m-z*8«oo 

BBd H 


(Branch Standard Rate is charged on borrowing arising 
without arrangement. Any such borrowings regulated by . 
the Consumer Credit Act 1974 are also varied accordingly.) 



— HS SSrasi.Ajitera.raa.Hpaw, omm 

rpiiipin 50.7 

— • t48 F*r Eawra UUt . 13(3 . +« 

, WSfcrSB, Sja, 583 

1-2484400 Eqrity A Law Ita. Tr. M. (a)(c) 

— 1 "re “ 6e ^^ c * w fasrn a ’ ci sra °?nl 

:.J2B KS§SK£r=Sg M 

-3886064. carer caiBTtoto MM., iouma -oa 

^"25 Ca reFrtlrt TtotoC OOO rigrt -fj 

^ ns sMsas==gl. JM. 3 

i- US assrtts*— *S3i M 


Hararau Admbdttntln (aXkXc) 1 s= 

toMre to o, HaUBA. Breraoa^ Essex mla 

Eralrte 0277 227300 DcalM* 0277261010 “LA 


MLA Unit Trust 
lSe»to«»heS«U 


Al LA Co. TsL 
MLA W4U, 


, „ Bresfarew 

» &*= 

a 

Hr te.araa— 


M g BflBssatt 

w us Isuittouil IbregeiH 

^ S?"S , re«.ira»E S *,2Qp 


S7PA. 01-588 6064. 
B7W -261 068 

■ora -zj <ue 

2JTri ... X« 

ia£« — - 186 

24L* - - 186 


BZ31 ItolEntol. 

IS a 

ug Cm In. 

JJ5 teirtaiBi. 

833 PM.£C0L 

flS CrtTnre. - 


0622674731 
+oa ui 

*& OJ* 
*0.41 094 


227 OrewOiF M 
fK MLSOnmthPKtototo. 




:?.V • 


Mradrie M i nig a muft | 


BteSraLTxtolSaU 1 1 ' 

088 Exeter Fand MaaaftnJAd. 


» as?s^ 




(toil Trert HMMU4-W MM 
MtlridM rei IWI U* 


FAC Urit toarari ■ 
JurerePBraHApHOM, 


CtoAFre i«._z_z 

5S Ssr5i* L ._ 

ss asanas 

S? 


-i 780 

•i: h 


Brawn SMpiey ft Ca Ltd (*Xo) 
4-17 PBfirrera Rd. Kura* H* 0444 


41 Larthbury London EC2P 2BP 


4-17 PafrynssM ltd, Kreowt 
BJ-rarttregFAd^.. .. , liM 
B.S Ami :TT1l46* 

8S.Cj.u4.toa F* ' 1*23 

as. Cto ! i Jan E» te— 1 1085 
E«re-F-to_^q»8 
Eretoto F-to__D 5704 
F uirt i + l l — , J 230 A 


FACFreEranF 
FACFtototebF* 
4U26Z0M9 F JcFotoateFd- 


085 FACtoTre — ] g« 
085 FlCAJtoXtorn+^SI 


3^j 4 


+05 £86 r*eotwratef« 
+ai 4.75 F ACUitSrrereFte 

-oi ar» FmiK ra f rO A re 


is SiSEESK!: 


1*680 

171 EmremSireACoi.. 

£« Eg gL 1 *- 7 ” — 

Ift^J JJBXflTnS 

g SaaeaKr 
g'BRSCk: 

Jg retire 

J® Aretr hahr 
ft 16 AareRcrerTfl 


^ J* LU* 




fowtoSreaZ 


. M-378 7000 

. 3 *. 


ft* >ra5?lS”- u, " a " BLthw. 


^ftl-zan^W 


■*_ - - l~ :7 


ji 




Financial Times Friday September 11 1987 



































































































































































































































































































































































































































Financial Times Friday September 11 1987 


41 


LONDON SHARE SERVICE 



FINANCE, LAND— Cont 


MB7 I 

She k 

I Ml hW LBrlL 
22 Nib Seated tor 10 b . 
, 27 Itotta Seaton 50*4 
MU NMuMeriaa, 

1 232 tettwa Sfs- 

frteteteaMsTaSflpJ 
Db.W*t*Ss 
hrteFittehLld 
raSteltateUtaH 

p^ athteTi 


£34* £24 


^“"Stad 


Da. Warns 
Be. Sowed PtbL 

WwrPteDff. . 

PbbCfflfBrJFT10_J 

DaS*ii3tfjra__4 


CSWotaallvnia 



Da. warns 

„ Do. Cttn Ptf Prtf 

. ISdnderGloM 
89 ffi cnt.Am. to.— 

— paLOte'A'. 
gtat Ea t to, 

Stxti™. TnTwmas J 
. Eat* Here A' 5p 
U4ipt.M0rt.Ar 

— Scnc_ Haloed 
5ec.AJtotetTa. 
Seora Market I*, S0p~j 

94«emdeTsLSaa.. 
ttbTSreslmr.Mip 


(Skirts kallac Car La 
teteCalwTaZ) 
strata nenee 

tattoo hr. Ta 
TRAnstrataTm 

TROtrefLoetaML—J 

nuiCmd 

TRHaneriRem 


rR North 
I 204% ntPacffic 
FRPtdo.1i 

nr 

ntTi 

rente Bar 

RnntaPactmFd—] 

3o, Wants 

FhrDSttBDteTalK 

Irn nanT te— | 

op. Warns 


MSDCto.TsL. 

138 J 102 hMtateTnaSQo-J 
•fi Meant Tn Up. 
DoMtpcOrWPf.— 
i Sectte lCp- 

itelPvTflSp- 
|U6 IwiiiaUa 

I 57 ) Do.WBTa*s 

|lD6 jYeami to lot mar- 


345 


OSV+i, 


167 -Z 

M 7»3 

2S2 -3 
inn +3 


* 4 - 

149 


m 


7.49 LO 

025 * 

m a? 
2J\ U 
0771 U 


as la 

023 LB 
ass L2 
*£ 3 ii 
000(09 
sOJ — 

‘ IQS U 

H5*7 — 

Ht 2 Z 
191 LO 
42 72% LO 
4272% LO 
iQHA LO 

484*9 LO 
M 08 

toslu 

Ftt|- 

tlWl 


Hi 

& 

an 

2tU3 

22 

toss 

s 5 

tan 


2Ld * 


ifl 

jg 

S 2 J 

KL56 

L2 

bOOb 

20 

ea» 

22 

1649 


F 50 

96 

.1 

nu 

152 

335 

12.98 

HL3 


Cw 


TH 

Sr* 

22 

10 

U> 

u 

05 


06 

2A 

LO 

68 
02 
2 2 
202 

09 


130 1-1 I 120/1 ♦ 1 20 


vm I 

MM 1m I 


Cm Ip. 

Finance, Laidc 



335 233 
105 133 
ZUh M4 


I Do7peQnR*dPrf 

yCatefiCa-( » „ 
rtn&J r>H 



■ iM.Ta .Ja-Q- 

1156 IhayTteaUpH 
1153 liJct wai RylOp— J 

' W 1 

35 (KatakTiattl 

■ lflpu 

JjdafiAatolOp-J 


03 43 

, SSls . 

1*5 1 11372131 1 1*1287 




03 



1 “ 

[1L1 


Inc 


[241 


| — | - 12.9 


“ 

1 25 1 


24 


K 

1269 


15l2 

309 


I L2 27(417 

OB. 

24 kl* 

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NOTES 


Unfcg atbente indtatot prtaa Md net iMdeadi a* h paaca ad 
d aani ha faniag25p.EBlnwttd a tatefnhB i nitotodcnwna» 
based an latest anal r epa ts aod acaxmts ud. tee i — ‘“r an 

MtendBWhal t ' f e a hi n BBi cv WEsan n l ntaHl an ,l iBel*toaa>i«to 

basts, eanihwper ten brtnj cnanntad a> profit Wter tnatton and 
uaeflete ACTtean topBtehc tmfaatad Itona Mcah 18 pn 
sent or laaradHfmnce K atateMTen "tM* dktrtotkn. Ctom at 
based an "maxtonra" dhtfflwUoo; ibis ccanpaes tedend cons ta 

profit after taxation, adadbn exceptional praftsHosies bat hdbteB 
estimated extent of oKsettaMe ACT.^ YW* are tend on aiddh prfeev 

are gras, adjusted to ACT of 27 per cm Mdafioar for rotoe otdectirtd 

dktrtnnta and rlghtv 
■ . -Tap Stock". 

• mte aad Lows narked tes haw been aftmedB ate far rights 
tom to cash. 

t tawta shoe hoanad or icsunred. 
t Interim since mknd, passed or detente 
n Tan-tree ta cnvresideflts oo a pp Mc to o n . 

% Flgsres or report malted. 

9 Not offlcUhr UK IfctHt detete pannltt 
5 USH; not Ibted an Stride ExthacQB anl 



w«r based on UL ri uuv year's eantlngv * Stead la leal tax. 

x OMdead ewer ta excess rf MKJ tfenev y OMIted and ylcM tote on 
raeiRer terns. xOMdend andyieM tachde a metal pnaa Ccwer 

da« not apphr » special paynea. fillet Addend and yfetd. 

BPretoeace dnddend passed nr detomL CCaadtaa. " MM— 

tender price. FD+ridead and yWdbaiad on prespecte Brother aBldal 

ete na tw to 1986-87. S Assumed Addend and yield after pHxftw 

scrip andtoridrtstoa. H DMdend aad ytald based on prasaactow 

ether official estimates far 1986. KOhMand and ted based as 



REGIONAL & IRISH STOCKS 

The foUowtop Is n adcotan of Reptanai and Irish stocky the tear t 
quoted in Irish caraq. 

Atopy l»20p- 
MgfiitaeQ 


loMSbn.0. 



NOSH Kdtc 

Psndliy%19B8_ £UK|| I Irish 

toL«.%84«9_J £971,1 | Uatt 


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BP 

189 


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137 

nr 

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2 B 

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1-5 


TRADITIONAL OPTIONS 

3HRiBNtb caH rates 


BAT. 

BOCGnv. 

RBR 


BTR. 


B arclays 
Beeehanr. — 

She Circle. 
B«a. 

Bnwattw. 

Brit Aerespace. 
Brit. Telecom— 
Barton Ort ___ 

Cactmrys 

Charter Coca.— 
ContnlMM 
Co«ri) 

rare 


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a p*op« 

5 

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RHM. 


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95 

22 

200 laixl Securities. 

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42 


Account Dealing Dales 
Option 

'First Declare Last Account 
Dealings tions Dealings Day 
Ang 34 Sept 10 Sept 11 Sept 21 
Sept 14 Sept 24 Sept 25 Oct 5 
Sept 28 Oct 8 Oct 9 Oct 19 

* New time dealings may take place 
from 9.00 am two business days earlier. 

The UK investment institutions 
again showed little enthusiasm to 
operate yesterday and security 
markets were unable to consoli- 
date early gains. A steadier US 
bond market and farther success 
in stabilising the dollar seemed 
good enough reasons for a 
rebound from Wednesday's lower 
levels, and markets opened more 
brightly. 

A fresh flow of encouraging 
corporate profits statements 
aided these more favourable 
views on the trend but investors 
would not be drawn. Marketmak- 


remain independent but specula- 
tion has developed of the UK 
group mounting a counter offer or 
Newmount launching a bid for 
ConsGold; the latter is scheduled 
to announce preliminary figures 
on Tuesday. 

Wellcome moved up smartly 
amid rumours that HoOVnann La 
Roche had abandoned develop- 
ment or its anti AIDS drug DDC 
because of side elTects. DDC is 
thought by some to be the most 
important potential competitor to 
Wellcome's anti-AIDS drug Retro- 
vir. The Wellcome share price 
closed 25 higher 462p. 

The major clearing banks made 
early progress reflecting the 
reappearance of buyers, but a 

subsequent lack of follow-through 

ers were soon reporting a lack of support saw prices drift back in 


Financial Times Friday September 11 1987 

LONDON STOCK EXCHANGE _ 

institutions hold off again and markets unable to extend 

early technical recovery 


volume and suggesting tongue-in- 
cheek that fund managers may 
have gone to ground to allow time 
to reduce the backlog of bargains 
outstanding for settlement. 

On a more serious note, the 
majority of investors were prob- 
ably holding back because of 
international worries. The US 
trade deficit for July is due to be 
announced today and, while chief 
economist Allen Sinai at Shear- 
son Lehman is forecasting 
$l&7bn, estimates in London 
range up to S20bn. 

Wall Street appeared uncon- 
cerned yesterday about the 
impending news — the Dow Jones 
index was up 28 points midway 
through the session — but leading 
stocks in London struggled to hold 
their gains and the FT-SE 100 
share index dosed only 4.1 higher 
at 2253.2. 

Business was largely confined 
to situation issues and Cable & 
Wireless recorded another large 
turnover of 13m shares. Once 
again Far Eastern buyers outnum- 
bered domestic sellers and the 
price rose 7 further to 4S9p. Other 
Electrical leaders traded briskly, 
notably Plessey and STC. 

The Gilt-edged sector also 
staged a technical bounce alter 
the US bond market's better 
performance overnight Medium- 
life stocks were said to be the best 
value, yielding nearly 10 Vb per 
cent at the moment, and traders 
were fairly active in the area. 
Domestic retail interestwas 
extremely small with institutional 
operators content to await farther 
developments in world bond 
markets. 

The situation in Japan was caus- 
ing some concern. Stories of 
excessive Zaitecb activities lead- 
ing to farther heavy losses in bond 
futures continued to come out of 
Tokyo. 

A lacklustre day in mining mar- 
kets was enlivened by renewed 
firmness in Consolidated Gold 
Fields. Since the T. Boone Pick- 
ens-led group tender offer of $95 a 
share for 28m shares in New- 
mount Mining, ConaGold has 
moved up sharply reflecting its 
2&3 per cent in the US mining 
group. ConsGold has stressed that 
it wished Co see Newmount 


late dealings to close virtually 
unchanged on balance. Barclays, 
having touched 579p helped by 
BZW recommendation, eased 
back to close only 7 higher on 
balance at 575p. Nat West, follow- 
ing its decision to sell its unit trust 
arm, County Unit Trust Managers, 
which has some £400m in funds 
under management, closed 3 
cheaper at7I2p. Among Merchant 
Banks. Hill Samuel, a weak market 
in recent days reflecting recent 
strife within the company, rallied 
to 645p at one point before easing 
back again to close unchanged at 
634p- Guinness Peat were an 
active market following the docu- 
ment rejecting Equiticorp’s 110 
per share offer GP made made a 
profit forecast of £30m for the year 
ending September; the Guinness 
Peat share price closed unaltered 
at 112p, after 113p. Schroder N/V 
rose ^ to E13% following the 
interim dividend announcement. 

Composite Insurances had little 
to offer in the way of price move- 
ments; but Commercial Union, in 
which 1.7m shares were traded, 
moved up 4 to 368p. Sun Alliance 
edged up ** to £1 (Pa. Elsewhre. 
London United settled a shade off 
at 763p. the good interim profits 
and proposed three-for-two scrip 
issue apparently disregarded. 
Among Lloyds brokers. Stewart 
Wrightson rose 14 to 553p; Willis 
Faber now speaks for 88 per cent 
of the ordinary shares WF were 14 
up at 372p. 

Buckleys, the Llanelli-based 
brewer currently in receipt of an 
unwelcome offer from B radian, 
the nominee company controlled 
by Peter Clowes and Guy Cramer, 
held at L83p following publication 
of the revised offer document; 
market rumours suggested that 
Messrs Clowes and Cramer now 
speak for over 40 per cent of the 
Buckleys equity. 

Redland's announcement that it 
intended to set up a joint plaster- 
board venture with Australia's 
CSR sparked selling of BFB Indus- 
tries on possible competition 
fears and the close was 39 down at 
354p; Redland. on thoughts that 
the plasterboard venture is 
unlikely to produce benefits 
before 1989-90, finished 19 off at 
SOOp. Elsewhere in the B uild i ng 


FINANCIAL TIMES STOCK INDICES 


SO HBH W IO fltSCC. 


Fixed Interest 


Ordnarye. 


Gold Mines. 


0rd.Div.YMd 
Earnings YM.%(MD — 

P/E Ratio (net) (*) 

SEAQ Bargains (5 pm) 
Equity Turnover (£m) — 

Equity Bargains 

Shares T/aJedfmW 


Sep, 

10 


8333 

9081 

17613 

448.9 

333 

845 

15-02 

3432 


Sep. 

ft 

Sep. 

B 

Sep. 

7 

Sep. 

4 

Year 

ago 

85.19 

8536 

8532 

85.72 

5732 

9L52 

9L60 

9235 

9ZOB 

9437 

1756.1 

17753 

17883 

17B2-1 

1317.9 

448.6 

4543 

4583 

451-2 

2973 

333 

333 

336 

337 

4-21 

8A5 

832 

835 

837 

9.66 

15.02 

14.94 

1535 

15-21 

12.71 

3L312 

33i427 

31333 

34,432 

— 

1037 3b 

1071.73 

80437 

L«*5739 

62330 

35,145 

35333 

35.792 

35,730 

22360 

1 4443 

— 

3523 

5063 

265-0 


1987 

High 

Law 

9332 

84.49 

(8/5) 

(6/17 

9902 

90-23 

(15/fa) 

am 

L9263 

L3203 

(16/7) 

12/11 

4975 


(<V8) 

(19/2) 


SMC* Compilation 


High 


127.4 
(90/351 

105.4 
(2S03M7) 
3.9263 
06/7/87) 

7343 

05/2/83) 


S.E- ACTIVITY 


Low 


49.28 

(3/2/75) 

5033 

(30/75) 

49.4 

06/600) 

435 

(26/10/7D 


Indfces 

Sep.9 

Sep. 8 

Silt Edged Bargains 

1110 

1095 

Eoutty Bargains 

227.7 

228.9 

Equity Value 

5-Day Average 

2096-8 

ZU&2 

Gift Edged Bargains 

105.7 

lO&l 

Equity Bargains 

2243 

2245 


19823 

2096.9 


t J 

Opening 

1759.6 


10 a.m. 
1763.0 


11 a.m. 
1764.1 


Noon 

1763.8 


1 p.m. 

1765.1 


2 p.m. ) 
1763.7] 


3 p.m. 
17633 


4 p.m. 
1760.6 


I Day's High 1766.0 Day's Low 1759A. Basis 100 Govt. Secs 15/10/26, rued IhL 1928, Onfirery 1/7/35, GoU Mines 12/9/55, 

( SE Activity 1974, *NB“14i78w 

1 



LONDON REPORT AND LATEST SHARE INDEX: TEL. 01-246 8026 


1 


interim figures from Tyne Tees; 
TT moved sharply higher follow- 
ing details of the figures to close 
38 up at 621 p, while stocks to adv- 
ance in sympathy includ ed L W'f. 
57E to the good at 990p. HTV 20 
higher at 398p and Thames, which 
rose 36 to 489p. Elsewhere in the 
Leisure sector, Spectrum 
attracted speculative buying on 
talk of an imminent anouncement 
and rose 16 to 72p, while Leisure 
Investments put on 14 to 172p on 
news that Brailhwaite had 
increased its holding to 14.21 per 
cent 

Jaguar rallied 7 to 546p helped 
by currency considerations and 
news of an impending rise averag- 
ing 7 per cent throughout its pro- 
duct range 

Home Counties Holdings, reflec - 
ting the good interim figures. 


amid talk that some 3m shares had 
been placed through the mar ket a t 
363p apiece. Britannia Arrow 
eased a fraction to 293’Ap follow- 
ing the purchase of County Unit 
Trust Managers frm County Nat- 
west for £4L5m; CUTM managers 
14 units and has over £400m of 
funds under management Fram- 
lington hardened A to £1-'A in 
response to the annual results and 
proposed sub-division of shares, 
while occasional interest was also 
noted for Antofagasta which put 
on 7 to 317p as Press comment 
induced interest ahead of the pre- 
liminary figures which are sche- 
duled for next Thursday. 

Burmah Oil touched 600p in 
immediate response to the 
interim results, but subsequently 
fell back to close 29 lower on 
balance at S67p; the company has 
flgnirt given shareholders the 
opportunity of a scrip alternative 
to the in term dividend. Tricentrol 
edged up a penny to 118p follow- 
ing increased half-year profits, 
while Ultramar, helped by its 


moved ahead to close 15 higher at ■ Dutc |, subsidiary's gas find. 


sector, Taylor Woodrow attracted 
keen buying and rose 12 to 440p, 
but George Wixopey, despite 
reports or sizeable support in the 
wake of the interim results, even- 
tually succumbed to profit-taking 
and closed 3 cheaper at 257Vfep. 
John Lalng revealed half-year 
profits slightly below market esti- 
mates and the price dipped 19 to 
360p. 

Leading Retailers lacked a deci- 
sive trend. Storehouse responded 
to sporadic new-time demand and 
finished a shade firmer at 367p, 
while talk of a broker’s bullish 
circular in front of next Wednes- 
day’s half-timer lilted Coats 
Vlyella 8 to 373p. In contrast, 
easier values prevailed in Button, 
8 off at 29tp, Woolwofth, 6 down at 
354p, and Next, 4 cheaper at 345p. 

Revived buying of Cable and 
Wireless signalled the trend 
throughout leading Electricals. 
Plessey traded actively and rose 5 
to 189p as market-makers stressed 
that the recent decline in the 
share price was “overdone.” BICC 
were also lively and hardened 5 to 
420p as analysts turned bullish on 
the shares in the light of Wednes- 
day’s excellent mid-term results; 
BZW, for example, advised clients 
to buy BICC “for growth and re- 
nting.” STC were another leading 
counter to attract substantial 
demand, closing 5*i to the good at 
294p- A welter of trading state- 
ments stimulated some interest 
among second-line stocks. Con- 
tinental Microwave featured, ris- 
ing 37 to 285p in response to the 
increased fall-year figures, but 
the lapse into sizeable losses left 
Acorn Computer II lower at 53 pl 
MBS dipped 7 to 254p, the return 
to profits at the interim stage 
being largely discounted, but in 
contrast; perennial takeover 


FT -ACTUARIES INDICES 


These Indices are the joint compibthm of the Financial Times, 
the Institute of Actuaries and the Faculty of Actuaries 


EQUITY GROUPS 
& SUB-SECTIONS 

Figures in parentheses show number of 
stocks per section 


49 


51 


59 


99 


CAPITAL GOODS (212). 

Building Materials (30) . 


Contracting, Construction (33). 

Electricals (12) 

Electronics (35) . 


Mechanical Engineering (60) - 

Metals and Metal Forming (7). 
Motors (14) . 


Other Industrial Materials (2X>- 

CONSUMER GROUP (184) — 

Brewers and Distillers (22) ~— 

Food Manufacturing (24) 

Food Retailing (16). 

Health and Household Products (20)- 

Le/sare (31) 


Packaging & Paper (15) — 

Publishing & Printing (14) . 

Stores (36) 

Textiles (16). 


OTHER GROUPS (87). 

Agencies G6) . 

Chemicals (22) 


Conglomerates (12) . 


Shipping and Transport (11). 
Telephone Networks (2). 

Miscellaneous (24) _ 


1NDUSTWAL GROUP (483). 


Oil & Gas (17). 


500 SHARE INDEX (500). 


FINANCIAL GROUP (118) . 

Banks (8) 


Insurance (Life) (9) — . — 

Insurance (Composite) (7). 

Insurance (Broken) (9) — 

Merchant Banks (11) 

Property (46). 


Other Financial (28). 


Investment Trusts (92). 

Mining Finance (2). 


Overseas Traders (10) — 


ALL-SHARE INDEX (722). 


FT-SE 200 SHARE INDEX $ . 


Thursday September 10 1987 


Index 

No. 


953J7 

118677 


273L78 

246082 

1998-95 

52538 

568.97 

TO.Ifc 

166946 

138016 

117445 

100647 

2404.03 

2468.97 

I38L53, 


66881 

076.73 

306607 


83453 

1125.99 


269843 

146021 

142449 


2245.79 

106744 

1664.77 


117SL02 


220311 


1265JJ7 


823,97 
nn x 
U0L72 


630.97 

121ft 


48250 

127227 


56052 


113552 


67547 

121434 


115245 


Index 

NO. 


22534 


Oafs 

Change 

% 


-tu 

-14 

-03 

+CU 

+03 

-4L1 

+03 

+04 

+L8 

+03 

-Qj4 

+0,4 

+L4 

+04 

-05 

-14 

-015 

+0.9 

+03 

+05 

+03 

-05 

+04 

+08 


+04 


+07 


+02 


-02 

-02 

-03 

+04 

+07 

—04 

-08 

+04 


+03 

—04 

+04 


+04 


Days 


+U 


EsL 

Eatons 

Yield* 

(UaxJ 


731 

758 

096 

533 

005 

7.71 
745 
754 
007 
649 
7.98 
744 
OOO 
443 
334 
042 
454 
067 
737 

7.72 
358 
073 
748 
7.49 
930 
940 


090 


750 


099 




949 


342 

5.95 


5.06 

746 


Day's 

JM. 


22507 


Gross 

Oh. 

YWd% 
(Ad at 
( 27 %) 


2.92 

2.95 

235 

241 
239 
348 
247 
2.90 
341 
253 
344 

347 

242 
152 

348 
259 
340 
2.74 
258 
344 
332 
343 
330 
355 
3.79 
241 


245 


448 


346 


3.73 

4.74 
3.96 
437 
45S 
243 
233 
2.73 


243 

246 

348 


342 


Day's 

Low 


22514 


EsL 

PC 

Ratio 

met) 


1748 
1649 
1946 
2440 
1649 
1031 
1742 
1531 
1951 
2055 
1547 

1749 
2248 
pnx 
2151 
2051 
2841 
2036 
15.75 
1014 
3079 
1848 
15.70 
1755 
1444 
1341 


1848 


1649 


1840 


843 


13.92 


33.91 

2149 


xd adL 
1967 
id date 


1458 
1742 
2( 1 8 5 
4147 
3073 

099 

086 

540 

2447 

1652 

3549 

1550 

3646 

1641 

2445 

831 

5953 

3330 

1143 

1459 
3140 
2046 
3942 
1098 
2149 


1081 


5053 


2044 


1647 

2555 

2149 

1339 

2047 

092 

1334 

7.91 


wed 

9 


Met 

No. 


954,96 

122949 

373426 

245743 

199346 

51648, 


56740 

38154 

165238 

129845 

117842 

99748 

248242 

243543 

137930 

67342 

462737) 

186538 

83149) 

112268 

168949 

145944 

142844 

2257.95 

1863.92 

1650.90 


117072 


2187.94 


Toe 

* 


lode* 

No. 


96460 
1217.90 1 
173736 
246835 
282836 


52130, 

57249 

tMW 

1673.73, 

131328 


1189421 

10HJ5 

243077 

245056 


139738 

68034 

469668 

108420 

843L22 

U3484 


169546 

147745 

143766 


1084851 

166062 


318936 


*p 


Index 

NO. 


96734 

121823 


173754 

247754 

204840) 

52266. 

57750 

38453 

160832 

3317501 

139066 

ldml 


244248 

246642 

148165 

684.94 

473744 

HNS) 

8*29 

114L52 

169627 

1477.91 

144748 

227858 

1096671 

1672.98 


119442 


126259 


82374 

82926 

110455 

62MZ 

12026B 

48435 

1282.99 

56832 


221736 




828.99 
82648 
1327 J3 
629.93 
1222.90 
48943 


223230 


128228 


56368 


824.97 
81748 
112934 
62066 
l Mans 
49244 
128549 
56166 


Ye 

ago 


Index 

No. 


69855 

817.93 

125824 

186625 

1472.91 
389159 
38762 
28341 

129568 

94873 

93845 

71234 

199434 

154636 

923.91 
483J7 

267452 

90139 

54646 

77932 

06 

967.65 

06 

354078 

77891 

108544 


84938 


133966 


89149 


61332 

67247 

88261 

48836 

119265 

34544 

76968 

35278 



22494 


FIXED INTEREST 



PRICE 

Thu 

Day's 

Wed 

xdadj. 

xd adi. ! 


INDICES 

W 

change 

% 

Y 

today 

1987 
to date 


British GaveiMunf 




m 

m 


5-15 years 

13338 

+028 







3 

Over 15 years — 

14106 

+044 

14055 



4) 

Irredeemables— J 

15430 

+014 

15438 

■ 

w£S 

5 

All Stocks- 

13L55 

+024 

13124 


Kb 


Index -UafcEd 








11930 

+022 

U9M 


238 

7 

Over 5 years - 

UliS 

+030 

11134 

la 

230 

e 

ah stocks — ■ 

U237 

+029 

11135 

B 

235 

9 


esa 

-065 

rrsi 

- 

wm 

10 


8439 

-032 

8067 1 

- 

330 



AVERAGE GROSS 
REDEMPTION YIELDS 

Thu 

Sen 

10 

Wed 

r 

Year 

ago 

(approxJ 

1 

MUAnrawt 

937 

938 

834 

2 

Coupos 15 yean — — 

9l89 

9.94 

060 


937 

932 

063 

4 

Medan 5 jean 

1044 

1047 

9.98 

5 

Coupon 15yara— . 

IOIB 

1023 

9.97 

6 


9.95 

IOOO 

938 

7 

High Syean. 

1052 

1055 

1006 

8 


3A3S 

1040 

1013 

■j 


IOOO 

1004 

9.90 



1003 

long 

043 

u 

Index-Linked 

Inflation rate 5% Sjnu 

3u*4 

3^47 

M2 

12 

Inflation rate556 OterSjn. 

436 

438 

3j47 

13 

laflaftwratelO* 5yn_ 

338 

3X11 

237 

14 

Inflation rate 10% 0 ht5p^ 

006 

407 

332 

15 

BaftsS 5 years— 

XL43 

1135 

1030 

■fa 

Law 15)tars— 

1L43 

1134 

1064 

fcj 

25| BBS— 

1L43 

1134 

1068 

flil 

Preference -* 

1084 

1081 

1080 


tdpeiifag irxta2253.7; 10 am 2SU* 11am Z25U; Non 2255.9! 1 pm2254.9!2pro2Z554;3lw2254.9!330 pm22S13s4 pm 22521. 

Issues. A new Rstoftsnstitmtsb 
4BY, price 15|L by past 32p. 


chestnut Strand Diffusion har- 
dened 3 to 64p with the aid of 
“call" option activity. 

BaOs-Bayce. down 3 at 108p, 
were actively traded (some 13m 
shares changed hands) in the 
wake of interim figures much in 
line with expectations. Cardo 
gained 12 to 210p following the 
decision to abandon its offer for 
Deritend in view of the higher 
counter bid firom Christy Hunt, the 
latter eased a penny to 103p. 
Revived speculative demand left 
Davies and Metcalfe 13 to the i 
at lfilp. Birmingham Mint 
np a couple of pence to 253p 
following the confident tenor of 
the chairman's statement at the 
animal meeting. News of the 
acquisition of Northwood Metal 
Services (Birmingham) and North- 
wood Fabrications enlivened 
demand for Hobson which 
advaced to 102p before closing 5 
higher on the day at 99p. 

— Rowutiee revealed interim pro- 
fits at the top of estimates, but this 
apparently failed to impress the 
market and the price drifted 
steadily lower to close 11 lower on 
balance at 550p. Gadburya Schwep- 
pes, on the other band, attracted 
persistent support and firmed 3 to 
Z72p, while Tale and Lyle rose 10 
to 839p. Banks Bevis McDeugall 
met with revived speculative 
buying and put on 4 to 325p, but 
Northern Foods, still oversha- 
dowed by rumours of uninspiring 
dairy sales, shed 2 more to 286p. 
Among Retailers, 3. Sainsbniy 
made fresh progress to close 3 
higher at 272p, but Dee Corpora- 
tion shed that much, to 217p- Else- 
where, Chambers and Fargns rose 
24 to 157p reflecting demand ahead 
of the annual results due next 
Tuesday. Bernard Matthews, also 


reporting shortly, revived with a 
gain of 6 at l50p. 

Farther consideration of the 
interim figures prompted a better 
trend in BTR which moved ahead 
to close 9 higher at 3S3 in a volume 


350p. US favourite Saatehi were 
noteworthy for a rise of 12 at 656p. 

Profit-taking in the absence of 
any bid developments left Ham- 
nwrson A 23 lower at 670p, while 
i and Securities drifted off to clos e 
11 cheaper at 566 p. MEPC, 
however, were steady at 546p, 
while Greycoat firmed 5 to 425p 
wrnirfing news from the annual 
meeting. Allied London softened a 
penny to llOp following details of 
the annual results and proposed 


£ Glaxo edqsdup & SEfiStolZm to coiveKble 

prefereoSshares, while Peachey 


Good annual results left DPCE 
10 higher at 295p, but Cookson. 
down 8 at 804p, and Associated 
British Ports, lower at 592p, met 
with occasional profit taking after 
trading statements. US favourite 
Reuters advanced 13 to 874p( 
while demand revived for Wil- 
liams Holdings which pot on 8 to 
879 p. Interlink Express, still 
responding to -the bumper pre- 
liminary figures, advanced 15 
more to 565p. J. W. Spear improved - 
5 more to 27Qp for t two-day gain of 
30 in the wake of news that Allied 
Entertainments had increased its 
stake to the company to 13.45 per 
cent Hyman, however, dipped 4ttz 
to 4 8Vi after the interim figures 
and the proposed £3£m rights 
issue. Sitter, scheduled to reveal 
its half-year statement next Mon- 


rewfrdeii some 

Tootholl rising 35 to 3-ttp and Slag ‘tt 

10 to 165p, the latter awaiting the end of tte moDtl1 and ,n 
interim results due on September 
2a 


regarding the group as a “ well- 
managed and diversified opera- 

Television issues forged ahead gP,” 1 ‘jKjfS JiSlSfSSS u 

NEW HIGHS AND LOWS FOR 1987 

BANKS Ol! CHEMIcSJcM. STORES ******* 

f2l ELECTRICALS fTL HEW LUW5 w 

ENGINEERING (3), FOODS C1L ABEWCWS (21 BAS1X Chemical New. 

ran G u^KcAsEKSrcE c& Jjjj 

LEISURE Ctt, MOTORS CD. mimes 

newspapers ax papers ax m9, "“* ES 

TEXTILES [XX TOBACCOS OX OX Musto “P*"* 


LONDON TRADED OPTIONS 




.CALLS 

( . PITTS 

Option 


E 3 

IE3 

O 

a 

O 

ICS 

Anted lam 

390 

\mm 

45 

58 

\MM 

15 

18 

<■4141 

420 


30 

40 

Efl 

28 

33 


460 

u 

U 

26 

I EM 

55 

58 

BriL AlrwafS 

1» 

16 



— 

8 

— 

— 

(*196) 

200 

10 

?4 

28 

14 

20 

23 


220 

3 

16 

19 

27 

36 

40 

BriL & Comm. 

460 

43 

58 

73 

10 

22 

25 

<*4651 

500 

20 

3/ 

52 

28 

40 

45 


550 

5 

17 

30 

70 

75 

75 


330 

41 

57 

66 

P-fl 

U 

17 


360 

18 

34 

47 

rfl 

21 

28 

BMHH 

390 

9 

21 

32 

Efl 

40 

46 

Cons. Goto 

1350 

175 

235 

27D 

33 

63 

B5 

(*14853 

1400 

140 

205 

245 

45 

85 

110 


1450 

Kb 

185 

220 

70 

111) 

135 


1500 

85 

170 

200 

100 

135 

160 

CoortauUs 

460 

Cl 

62 

78 

10 

18 

24 

<*4881 

300 

wsM 

38 

56 

26 

34 

40 


MO 

n 

22 

36 

66 

71) 

72 

Com. Union 

300 

73 

84 


2 

4 



(*3683 

330 

46 

39 

67 

3 

9 

14 


360 

19 

39 

47 

8 

17 

22 


390 

8 

20 

31 

2b 

31 

36 

Cable & Wire 

390 

75 

92 

105 

HM 

10 

IS 

(*45» 

420 

53 

72 

84 

Efl 

18 

25 


460 

24 

44 

64 

ESI 

30 

43 

Britt* Das 

166 


E£S : 



6 

10 


<*167) 

180 


Em 

16 

16 

18 

21 


200 

u 

H 

U 

33 

35 

36 

&E.C, 

200 

18 

27 

35 

5 

10 

12 

MOO) 

220 

6 

17 

24 

14 

20 

26 


240 

2 

10 

18 

31 

36 

40 

Grand MeL 

500 


65 

75 

PS 

13 

20 

<*534J 

550 

Fl 

37 

48 

rs 

.98 

45 


600 

mm 

18 

27 

ts 

70 

77 

IOL 

1500 

71 

130 

153 

23 

44 

63 

t*1538> 

1550 

48 

102 

122 

44 

65 

85 


1600 

28 

78 

102 

75 

90 

110 

Land Setnrftles 

500 

75 

90 

105 

PSI 

11 

13 

(*567) 

550 

40 

57 

73 

PS 

(fl 

33 


600 

15 

33 

45 

tSi 

Lfl 

60 


220 

17 

25 

31 

6 

12 

14 

(*2281 

240 

7 

13 

22 

» 

2) 

25 

260 

3 

8 

14 

36 

37 

39 

Britoti 

300 

29 

42 

52 

9 

Lfl 

21 

C31U 

330 

11 

75 

35 

21. 

Efl 

33 


360 

4 

15 

26 

45 

Efl 

S3 

Rofc-Rojce 

100 

14- 

IB 

74 

S3 

8 

12 

won 

' 110 

8 

13 

19 


13 

18 


120 

4 

10 

15 

Wm 

20 

25 


130 

2 

6b 

— 

Lfl 

28 

— 

Shell Tram. 

1300 

73 

125 

_ _ 

33 

57 



<*1350> 

1350 

52 

103 

140 

53 

» 

107 


1400 

28 

80 

115 

85 

11)7 

128 


1450 

18 

63 

98 

123 

140 

165 

Trafalgar House 

330 

43 

52 

_ 

■ ■ 

6 

— 

(*3651 

360 

20 

32 

43 

Efl 

17 

20 


390 

7 

18 

30 

Lfl 

3/ 

40 


420 

3 

8 

18 

Efl 

62 

67 

758 

130 

15 

21 

24 

SO 

n 

5 

(*142) 

140 

7b 

15 

19 

sn 

■1 

9 


150 

3b 

9b 

13 

Efl 

Efl 

15 

Wuohmuth 

330 



55 

70 


11 

37 

(*355) 

350 

25 


— " 

15 

— , 



360 


_ 

42 


— , 

32 


375 

IS 

35 


27 

42 

— 


900 

95 

118 

147 

8 

20 

X 

(*974) 

950 

58 

80 

108 

20 

40 

52 


1000 

» 

55 


45 

65 

77 

6KN 

360 


52 

FI 

lJ 

PS 

23 

(*382) 

390 

|1 

34 

Lfl 

19 

PA 

37 


420 

MM 

22 

iifl 

41 

efl 

57 

Japnw 

500 

SI 

85 

95 


PS 

20 

(*S4« 

550 

25 

55 

65 

22 

Lfl 

43 


600 

4 

32 

43 


Efl 

70 

Option 

O 

O 

EZ3 

E3 

C3 

Jm 

Barclays 

(*539) 

500 

550 

100 

58 

El 

132 

92 

8 

17 

12 

27 

17 

35 


600 

2b 

El 

« 

40 

47 

55 

MMand Bk 

460 


wzm 

n 

cm 


22 

(*+35) 

4S5 

M 

rl 

Rfl 

Fl 

30 

— 


500 

fts 

Eft 

ra 

eft 

— 

42 

Option 

CM 

O 

0 

C3 

EU 


Brit Am 

460 

30 

70 

82 

15 

25 

33 

(■495) 

500 

30 

50 

6? 

35 

43 

52 


550 

12 

30 

43 

70 

77 

82 

BAA 

120 

20 

25 

30 

3 

6 

9 

(135) 

130 

14 

19 

2S 

7 

12 

15 


140 

8 

15 

20 

13 

IS 

19 

BAT In* 

600 

67 

87 

97 

U 

17 

25 

<*65M 

650 

34 

57 

68 

33 

42 

47 ; 


700 

16 

35 

47 

62 

67 

73 



n 

r~m 

40 

10 

PS 

24 

(*262) 


Lfl 

rfl 

30 

25 

pfl 

34 


ESI 

lfl 


— 

40 

Efl 

— 



FM 

35- 

42 

8 

13 

17 

(*272) 

280 

10 

23 

28 

18 

a 

27 




| CALLS 

r: 

PUTS 

. 1 

(Wan 


itsa 


iEza 

ica 

LJ 

\tzm\ 

(Mows 

330 

47 

53 

63 

6 

12 

13 

(*365) 

360 

23 

3b 

46 

14 

23 

25 


390 

11 

23 

32 

32 

38 

40 

Ladbroke 

420 



52 

IF1 


IK lfl 


(*447) 

443 

24 


sfl 

20 

Kfl 



460 

16 

30 

'Efl 

33 

Efl 


LAS MO 

280 

96 

104 


2 

3 

EH 

<*37Z) 

300 

77 

89 

99 

2 

9 

13 


330 

53 

70 

a 

9 

15 

a 


360 

34 

68 

63 

20 

25 

33 


390 

19 

36 

49 

36 

40 

45 

Plessey 

01 

34 

41 

50 

■ fl 

Kfl 

|E« 

(-189) 

■ Cl 

20 

70 

36 

Kfl 

Efl 

Efl 


id 

10 

18 

26 

Efl 

Lfl 

Efl 

"■ ■ — * 

rffUenwi 

9S0 

77 

UO 

12 

Efl 

32 

42 

(•9983 

1000 

50 

82 

97 

LJ 

60 

75 


1050 

30 

62 

77 

mm 

86 

100 


UOO 

lb 

40 

— 

EM 

122 


P-4 0. 

K2X 

— 

— 

93 

E m 



37 

(*683) 

■CCl 

30 

52 

— 

Fl 

40 



Keel 

— 


62 

Kfl 


63 

Racal 

280 

31 

44 

56 

9 

17 

22 

(■296) 

300 

19 

34 

45 

18 

26 

33 


330 

9 

2b 

33 

37 

44 

50 

R.TX 

1150 

155 

215 



15 

43 


(*1233) 

1200 

120 

185 

225 

25 

60 

90 


1250 

95 

160 

200 

53 

US 

120 


1300 

73 

MO 

180 

80 

115 

155 


1350 

58 

120 

• — 

110 

146 

— 

VteS Reris 



a 

25b 

BS 

o 

13 

(*1391 


tpd 

17 

a 


14 

16b 




13 

16b 

EM 

19 

20b 



1H 

lb 


Ob 

0» 



(*104) 


(Pg 

°i* 


i/« 

IB 

— - 



oi| 

Ob 


2b 

3b 





0<i 

Ob 

Efl 

4b 


— 

Tr. 12% 1995 

106 

— 

— 





2b 

(•1071 

108 

— 

— 

EM 

— 

— 

3b 

Trjlt«%034)7 

110 

3A 

«b 


lit 

2,1 

3b 

(*J12) 

U2 

2b 

3b 

3li 

2b 


4,1 


114 

116 

R* 

Ob 

ii 

2B 

18 

3 

5b 

Option ] 

E3I 

ca 

1 m M 

E3 

ESI 

E2fl 


140 

301 

■cs 

Em 

u 

8 

12 

1*1691 

160 

14 

i fl 

rm 

Rfl 

15 

20 


180 

ED 

Efl 

m 

Efl 

24 

29 


460 

KCS 

90 



6 


PS35) 

500 

Cfl 

58 

75 


15 

22 

550 

■fl 

27 

4S 


36 

43 



■fl 

12 

22 


70 

75 


M"'J 


51 



ra 

n 1 



(•301) 

03 

rfl 

35 

43 

1 , 

p ■ 

11 

300 

Lfl 

22 

33 

9 

rfl 

20 


330 

■Efl 

U 

18 


ifl 1 

36 


280 

74 

78 


H' 

■■ 

— 

<■3531 

300 

S3 

60 

TO 

■ill 

Kfl 

7 


330 

24 

35 

60 

U! 

rfl 

15 


360 

5 

20 

33 

Efl 

Efl 

28 

BkeOrrie 

450 

IB 

40 

cm 

Efl 

25 

— 

(*453) 

460 

efl 



ufl 

Efl 


38 

475 

Kfl 

27 

Efl 

^^fl 

42 

— 

De Sm 

1200 

390 

400 

m 

Efl 

40 

— 

(*15751 

1300 

290 

310 

Efl 

Efl 

60 

— 


1400 

195 

230 

Efl 

Efl 


— 


351 

18 

a 

PS 

■s 

— 

— 

1*360) 

360 



ra 


22 

24 


3ai 

3 

Efl 

Efl 

Efl 

— 

— 


16S0 

57 

125 

175 

20 

70 

88 

<*16796 

1700 

30 

95 

150 

50 

93 

UO 

1750 

13 

75 

130 

85 

125 

135 


1800 


57 

105 

123 

155 

165 


1850 

2 

43 

87 

180 

190 

195 

Hanson 

160 

cm 


D» 

■Si 

MM- 

3b 

(*183) 

165 

Efl 


lfl 

S3 

Efl 

— 


180 

■fl 



flyft 

Kfl 

9*2 


200 

Kfl 


mm 

Ku9 

Efl 

a 


280 

cm 


49 

Bfl 

— 

12 . 

(-306) 

300 

lfl 

29 

39 

n 

13 

a 


330 

kfl 

15 

a 

Efl 

33 

37 


140 

26 

30 

35 

BS 

■j 

4 

(*164) 

160 

9 

17 

22 

Kfl 

Efl 

11 | 


180 

lb 

8 

15. 

Efl 

Efl 

22 


167 

ES 

24 


1 

4 

— 

(183) 

183 

lfl 

18 

25 

7 

13 

14 


200 

Hfl 

9 

U 

20 

26 

30 

Ttart EMI 

650 

ta 

60 

FM 

Kfl 

25 

ftfl 

(-660) 

700 

kfl 

27 

lfl 

Kfl 

57 

lfl 


750 

cs 

15 

CJI 

Efl 

100 

Efll 


IS~1 


40 

cm 

I 

■ | 

— 

WmSm 

■ta 


2b 

n 

.3 

11 

12 


Option 

EM 

K3 


EM 

E3 

EM 


r*!hpi 

FT-SE 

2150 

wn 

HTF* 




22 

32 

Bil 


2200 

78 

US 

130 

iso 

la 

36 

48 

60 

(•2252) 

2250 

47 

75 

10Q 

122 

38 

57 

67 



2300 

25 

52 

75 

95 

67 

US 

97 

100 


2350 

10 

33 

55 



SK> 

118 

128 

— . , 


2400 

5 

n 

38 

— 

152 

UO 

166 



2450 

2 

12. 


E 

POL 

201 




StpWKher 10. Total Commas MjayWB 1S6W. Pws.15^80. 

FT-SE Indm Cam L287- pmir.917 
nioafriyiog senrtj pritt- 


firmed 7 to 287p. Shell moved up ** 
to £13'* ^ 

Polly Peck adged up 4 to 370 p, 
but interest in other Overseas 
Traders tended to fade after the 
recent good run. 

Traded Options 

Option dealers expressed 
disappointment over volume 
which amounted to 34,150 con- 


reacted on profit talking to close 6 
off at 430p. Estates Property 
Investment were a weak market 
pending further bid developments 
and shed 22 to 233p; bidders Lou- 
don Securities shaded 3 to 76p. 

Companies reporting trading 
statements claimed most of the 
attention in Textiles sector. Brit- 
ish Mohair, reflecting the good 
half-year results, advanced 8 to 
234p, while John Haggas' 
responded to the preliminary 
figures with a gain of 8 at 214p. 
Lower """ini earnings, however, 
clipped 2 from Sirdar at 145 p. 

Rothmans International, 
boosted afresh fay continuing 
Brieriy stake-building rumours, 
advanced 23 farther to 424p. 

Financials returned to favour 
under the lead of MAI which adv- 
anced 18 to 656p following a bull 



Argyll Group 


Volume 
000 's 
2600 
688 
L90Q 
B12 

Assoc. BriL Foods- 258 

BAT 1400 

BET—. W 

BJCC L900 

BOC 387 

BPB lads 6,400 

BPCC 803 

BTR 5300 

Barclays 2300 

Bass — 170 

Beedara 1,700 

Blue Circle 443 

Boots — — 4600 

Brit Airways 742 

BriLAero 1300 

BriL & Comm. 270 

British Gas 5600 

BritoJI 1600 

BP 1400 

BriL Telecom. 

Bunzl 

Burton. 


Gable & Wire 

CadwrySchmas— 

CoabVMIa 

€omm. OataL—,,— 
Coos. Gold — — — 

Coolraon 

Courtinlds ■■ 

Dee Como — 

Dixons Group—— 
Englhii China Cta^S- 

FiscMS— 


Globe hTVBStmeot — 285 

Granada — — . — — 665 

Grand Mel — ■ — 2600 

GUS M A" 446 

Guardian R. E— 85 
GKN — ... 528 

*Miw«r: 863 

HansoaTruSt . . Sl200 

HavterSidd ^ lira 
HfflsdwmHIdgsJ— 126 

ICI 675 

Jaguar L500 


Closing 

price 

194 

414 

167 

413 

360 

655 

266 

420 

537 

354 

358 
353 
575 
974 
536 
453 
301 
H6 
495 

485 • 
169 
318 
362 
262 
230 
294 
4S9 
272 
373 
368 
£14* 
804 

486 
217 

359 
480 
357 
£ 10 % 
210 
£16% 
17V i 
331 
534 
£1313 

365 

670 

183b 

_572 

316" 

£15b 

546 


day's 


-2 

-2 

+1 

-1 

+3 

+1 

+5 

+2 

-3ft 

-16 

+9 

+7 

-3 

+5 

+1 

-3 

-1 

-1 

+2 

+3 

+2 

-5 

-8 

+7 

+3 

+8 

+4 

+0% 

-8 

+3 

-6 

-ft 

+2 

+5 


+0.V 

-2 

-2 


, Stock - 

Ladbroke 

Land Securities 

Legal & Gen. —— 

UoytftBaak 

Lonrbo 

Laras . — — 

MEPC. 


Marks A Spencer > 

Midland Bank 

Nattiest Bank—— 

Next 

Pearson.. — — . .. 


P&O. 

Piltdngtcn Bras. - 

.Plessey 

Prudential 

Ratal. 


RankOrg.. 
RHM. 


Recfcftt&Coi. 

Redland 

Reed Inti. — 

Reuters — 

RMC 


RT2> 


RoRs-Royce. 

Roanftree. 


Ryl Bank Scotland _ 
Royal Insurance—. 

STC 

Saatehi ASaatshi — 

Sababory 

Scott & Newcastle ^ 
Sears. 


Shell Trans. 

Smith & Nephew — 
Suodard Chart. — - 
Storehouse— 
Sun Alliance —. 

TSB 

Tar m ac — . 

Tesu_ — 


— Thorn EMI 

i 

+1 Uni lever 

-1 _ _ . _ UnltexJ BhcuHs. 
-T-- - Wellcome. 

+V : 



Watome 
000's 
1.100 
997 
694 
LOOO 
L200 
47 
797 
3k200 
711 
1500 
LOCO 
399 
1,000 
701 
6.700 
872 
3,300 
431 
1300 
89 
2300 
406 
670 
62 
234 
12350 
2300 
458 
586- 
b>ZX} 
547 
L200 
129 
2800 
lACO 
L400 
790 
419 
3,400 
426 
LSW 
L700 
452 
LOOO. 
L600 
356 
.799 
722 
. 5% 
161 
3,400 
145 
UDO 


Closing 

price 

449 

566 

315 

353 

729 
546 
226 
494 . 
712 
345 
782 
681 

295 
189 
997 

296 
675 
325 
£lli« 
500 
529 
874 
478 
£12L 
108 
550 
394 
553 

294 . 
656 
272 
246 
164 
290 
D3k 

166b 
801 
367 
£ 10 % 
141 (2 

295 
183 
658 
365 
250 
287 
370 
622 
319 
462 


Bay's 

change 

+2 

-II 

-3 

-5 

+11- 

+1 

+2 

+1 

—4 

-3 

—4 

+5 

-6 

-1 

+5 

+01; 

-9 

+4 

-19 

+13 

-9 

-ii 


+■5*2 
+ 14 
+3 
-2 

+04* 

+3 

+3 

+3 

$ 

-b 

*1 

-2 

+7 


.+8 

“T“ 

+25 


RISES AND FALLS YESTERDAY 


British Funds 

Corporations, Dominion and Foreign Bonds 

Industrials -. — _ — — 

Financial and Properties — 

Oils 


Plantations. 
Mines. 


Others 


Rises 

Fails 

Same 

93 

12 

7 

16 

3 

35 

453 

446 

6 B2 

143 

137 

330 

36 

27 

51 

l 

4 

9 

63 

48 

79 

113 

48 

73 


Totals 


917 


725 


1,266 


LONDON RECENT ISSUES 


EQUITIES 


few 

Pw* 


JUO 
245 
tt 
80 
*50 
10 
100 
■ B 
ns 
1 a 

4140 

41(30 

92 

100t 

fllO 

$1058 


an 


PlM 

W 


FJ». 

100 

FA. 

F.P. 

F.P. 

F.P. 

FJ». 

FJ>. 

F.P. 

F.P. 

FJ>. 

F.P. 

FP. 

FJ>. 

F.P. 

F.P. 

F.P. 

F.P 

Ffi. 

F.P. 


E3 

1987 , 

a 

123 

□1 

18-9 

321 

U» 

28/8 

147 

130 

— 

84 

65 

— 

108 

85 

V) 

93 

68 

— 

12b 

2 

2319 

114 

103 

— 

118 

92 


100 

70 


154 

78 

26® 

215 

180 

— 

145 

iCW 

— 

126 

116 

— 

155 

Ufa 

— 

98 

55 

4/8 

281 

1B5 

— 

517b 

515 

26® 

118 

93 

— 

128 

201 

— 

166 

143 


Stock 


Adseene. 

BAA. 


BMP Gold Mines ASQ25 

•ChemEx. Inti. 


«orp. Estate Props. 5p 

EFM Dragon Trest SpJ 

Fa Spanish I iw.Tw. Units 
SGuhJrtoHseBrp. Ip. „ 
Do-Wafranu 

Ketsce 


KtagserangelOp . 


KmgmniOiJ&GasSOp - 

•tcadog Uhure 

'MMirace lOp 

Mtnrgote In*. War. 

i Parkway Sn. 


Portugal Fund SO .01 

ftRunri Planning 3p. 

S'raqer A Fr’dhnder lOp 

Zettert Leltare lOp. 


Prce 


208 

135 

77 

10b 

7b 

12 

110 

92 
70 

143 

197 

118 

116 

155 

90 

255 

H7Xz 

93 
101 
163 


+ or 


+2 


-1 


-7 


FIXED INTEREST STOCKS 


LZS 

Lb.6 


L0.75 


u2-2S 

0.9 


RJL5 

RL6 


U5 


77SUB5 

Cor’d 


2.4 


3J 


Gross 

IYWB 


L3 


Lb 


L3 


P£. 

Rauo 


228 

17i 


4L5 


35.4 


29.9 


urns 


402 

zai 


296 


Issue 

Price 

£ 


k 

100 


Amount 

PM 

W 


F.P. 

F.P. 

F.P. 

F.P. 

FJ>. 

F.P. 

£2S 

FJ. 

HU 


Latest 

Ream 

Date 


11/11 

vn 


1987 


High 


mso 

nh 

W5p 

lM 

10W. 

100 

270p 

3t»a 


lQlp 

97 

nop 

99 

Ws 

100 
121 . 
200p 

Lm 


“RIGHTS” OFFERS 


Capital 4 Cowries 5?»% Cm. Prf 

gwtoWd Pnips 5W Cr. Cm. PH. 
Merta IntL Cm Red. Cm. PH. ___ 
H*ntde AngHa 10% Bdt l/ftm ,, 

Do.lOA% Bdi. 22®88 

Do. lfllint. 12.9.8a. 


M««h Mousing Assoc. Wstt. Cld. I il 2037 

Da. Zero Cowl 

Vrinerttn lm. 8% Cm. Uas. Ijl lm " 


Dostag 

Wee 

£ 


VOp 

99 

991, 

99a 

100 
I5ij 
21Sg 


-h. 

-2 


hue 

Price 

Ammo* 

PaW 

V 

Lara 

Rcmmc 

Date 

191 


SBC 

MB 

— 

30m 

8 

Nfl 

— 


166 

Nil 

— 

3ooi 

650 

Nil 


103pa) 

330 

wa 

9/10 

40pm 

810 

m 

9/10 


37 

NO 

19/10 

24<m 

50 

Nil 

7/10 

162pm 

257 

NU 

— 


32 

B.iH 

23/10 


90 


22/10 


182 

NU 

— 


90 

Ml 

U9 


190 

Bn 

U/9 

28pm 

57 

■rfl 

US) 


45 

Nil 

2319 


400 

Nil 

2/10 

S35om 

65 

NH 

•FTTl 

45m 

83 

m 

MB 

24bP« 


an 

UOO 

23pm 

UO 

Nil 

5/10 

7pm 

* 




140 



36pm 

33 



Tbpai 

65 



51pm 


]Ou 

**«*wWHId®inp 

a-m&FHMimWwr 

Startey (A^J Jp 

TattoSp. 

upmiEj 

KewtnciaUan date nsuaUy tot day far dealing hce of staom mm 1 

<Brwwtajralmflies.d Olvteiid rate naM nr ‘hridend . b Ftgureaha^d 
raWlnL S Assumed dJHOend aw! **»d . h Asswtaeriawdww baied 00 drifriend Ofi (uU j 
Mt»a*eain m ediw omclrt ^ f Krttend and yield 

other official estimates for 1987 . L EsOmmt# ^ 80 »»*• 

•wntaes. 9 Eorelnos based on preliminary has « J “* 

k»edonpiii8pe««ModierBllielales4hSB! 1 **’* sw ^ ww «"d p/e ratio 


Low 


20pm 

10pm 

lpm 
93pm 
16pm 
. 71tDm 
20pm 
138pm 
35pm 
83pm 
20pm 

>4flm 

5pm 

16pm 

5pm 

tumr 

500pm 

26pm 

19ljpm 

16901 

l'aira 

lVpm 

26pm 

2<a>m 

38pm 


Stack 


AAF , 


80*1 Moldings . 
Blue Arrow 5p. 
ftBrookmum. 


Cjb«iioSUiib.20d 

Capital &Cpmtiei Unit. 

Caman Bras. Ip 

Conrad Maps 

ftDewey Warren lOp 

tkmnietirae 100 

EacaUbarJewenery 

FKlEJeoricaiiop. 

Goal Pet. So. 


vCoadhead Prmi20p . 

•Wloe* Trail lp 

horibftCaiHuiSo,^ 
Oeen & RmriiBM 5o_ 
Put (Ml LenareSp_ 


dating 

Price 


30m 

12pm 

lpm 

93pm 

21pm 

20pm 

154am 

39pm 

83pm 

20pm 

tapai 

12irom 

18pm 

8am 

innm 

535pm 

43pm 

19>jpm 

16pm 

1<PM 

■Vpm 

36pm 

6>ym 

46pm 


+6 

-I 

-h 

-5 


s 


tracts struck— wel short or the 
levels prevailing earlier- thns 
week. Nevertheless, a few d asses 
stodd out, notably Bolls Boyce 
which attracted a lively and 
evenly-balanced business in the 

wake of the interim figures with 
1.962 calls done, 1.085 oF which 
were transacted in the October 
120's; Rolls Royce also recorded 
2312 puts, with the October 100 
series proving popular in. attrac- 
ting 1.125 trades. Simiar condi- 
tions were noted in British Tele- 
com with 2,401 calls and 1,482 puts 
struck. Cable and Wireless were 
also in demand, largely reflecting 
continued foreign dema nd fo r the 
underlying shares, and attracted 
1377 calls. As on Wednesday/ Brit, 
isb Gas puts met Substantial 
demand with 4.790 contracts done, 
the October and January 165 
series coutributing2,132 and 2300 
trades respectively. 

Traditional Options 

• First dealings Sept 1 

• Last dealings Sept 18 

• Last declaration Dec 3 

• For Settlement Dec 14 

For rote indications see end of 
London Shore Sendee 
Stocks dealt in for the call 
included Pelrocon, North 
Ealgurli. Paul Michael Leisure, T 
and N, Singer and Friedlander, 
Sound Diffusion, Eagle Trust, 
Barra tt Developments, Feedex, 
Chart* rhall. Control Securities, 
Sejant, Felly Peck. Meorgate 
Investment Trust and Wellcome. 
Puts were arranged in Astra 
Holdings and Power-screen 
International, hut no double 
options were reported. 




TRADING VOLUME IN MAJOR STOCKS 

The following is based on trading volume for Alpha secorities draft through the SEAQ system 
yesterday until 5 pm. * . 




-5 


3 


+17 




-2 



wnmui dhUnd.- p/e ralto tocti an kmst annual ejrm*r^^^jJ, ndK 


Pm Puma r^Tto 








































































































































































































































































































































OVER-THE-COUNTEi Nasdaq national market, closing prices 


S0*k 

Mb 

ffigk tm* tori Oma 





Continued from Page 45 


1 

P'-O 

' •• 


PACE 

87 

71, 

7* 

7% 

PCS 

IB 79u3Z% 

32*4 

32%+ % 

PNC 158 

132400 

48% 

47% 

48 + % 

PacarlXSOt 

14 131 

68% 

UB 

80%+ % 

PocF0txn» 

4 613 

20 

18% 

»% 

Pan tea 

38 401 

ir% 

10% 

«%+ H 

Parim 

PauIHra 

28 25 
23 232 


Si 

5?- % 

Paychx 

45 221 

2/% 

25 

36*4+1% 

Payco 

27. 7 

10% 

10% 

10% -. 

PoflGld 

631164 

22*4 

21% 

22 + % 

Paabcs 58 

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Tabnan 2B 10% 10% 

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US Tm 1 
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Ml Wgfa 
<*Ms» 

14 31 44 

21 555 20 
16 351 17% 
21 465 8% 

V V 

30 188 37 
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10 115 84% 
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56 B5 387, 
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84 513 217, 

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«% 431, 

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17% 17% 

8 % 8 %+ % 

SO 367,+ % 
6% 85-16 
15% 15% 

15% 16%-% 
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3% 3 f, 

16% 18*4 + % 
38% 387,+ % 
97, 10%+ % 

W% 11% + % 

18 17 +1 

20% 21% +1 
28% 30% +1% 
SO 88% +2% 


OTSfConso&Jated 1509 Aetna* 


Traded 

_ 1J21J80 

- 1.741-400 
~ 1-4S2JM 

- 1J42A09 


fric DaDay TrM Prim o, D*y 

17Vi + 38 Eton Co 1JZGM08 41 +48 

3248 + 4h NasaLP-Pfdft- 122688* U web 

6840 + 40 Oryrif.— - 1 HMOD 43 Mth 

15740 + % IHkCb 1 105 JOB 3240 + 40 


i_ MfUW lim + 240 MadMr 


LXnflUM ■- Hast Active Stacks 
Thursday. Soptnuhv 10. 1087 


umjm 3344 + (40 


-Sjtunsu Sermon S: Japaa Mifcfcei 25J65J. TSE 2D95UB 

Base whies of all indices am 100 except Brussels SE-1JD00 JSE Gold-255.7 JSE Induunais- 
2MJ and Australia. All Ordinary and Metals -500; NYSE AO Common— 50; Standard and 
Poor's — 10; and Toronto Composite and Metals— 1000. Toronto indices based 1975 and Montreal 
Portfolio 4/1/63. t Excluding bonds. 1 400 Industrials plus 40 Uulltiev 40 Financials and 20 
transports, (cl Closed, (u) Unavailable. 


TOKYO- Most Active Stocks 

Thursday, September 10, 1987 


WD 40 1.32a 
WaltofO -40 
WaftSv -22 a 

Warron 

WashEsl.28 
WFSL* -60 
WMSSs -40 
WatrfGI-44e 
WaHolndOea 
WwmP -48 

vEto®* 

Wasrcp 

WslAut 

WnCap 

WUFSL-lOa 

W«nPb 

wrriA 

WBmrk 

WmorC SO 

WslwOn 

WsaralXMb 

WDyJA 1.10 

wmarmiXM 
MUAL 
WTISFSJKe 
WUmTi M 
Wtbn F 
Mndmr - 
WUerO M 
WDbura 20 
WCYS .15a 
WOW 

Wormgt.40 
Wyman JO 
Wyw 


W W 

24 75 35% 35 
14 1043 u31 20% 

267 12% 12 
56 8% 8% 

M 96 187, 16% 
7 38 2B*, 27% 
41100 20*z 20*, 
15 27 10% 10% 
20 208 23% 22% 
13- 135 28% 20 
1 TPU 19lm 
15 8 22i, 22% 

101 7% 7*2 

S3 182 13 12*« 

9 81 16% 15% 
B 637 37*, 36% 

26 8S 24 2% 

IB 121 15% 15% 

13 13 16% 16% 

1004 20 10 

13 18 21% 20% 

373032 28% 26% 
17 21 50% 48% 

45 8 41 40% 

14 111 58% 55% 

15 700 20% 20*4 

8 14 14 

14 615 29*2 26% 
O 213 9% 8% 

17 554 11% UP, 
128 7 19% 18% 

11 4 11 11 

110 13% 12% 
2033 8 7% 

a 770 24 23% 

151 19*j IS 
213343 33% 32% 


85% 

an%+ % 

12 

8% . 

22* + * 
<8*4 

ao%+ % 

2 a%- % 
28%+ %. 
w. 

22 % _ % 
7% 

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23%+ % 

15%+ *4 
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41 + % 

56 - % 
20 %+ % 

14 

29%- % 

lP+% 

127, 

a + % 
23%+ % 
19 

83% + 7, 



Tiadnf Men m Day ■ 

MbtStnl 53.12m 291-0 NyponUn. 

SppeaStMl— 4153a 345 - 2 Fn^tia 

Ofa Bac 24.75m 845 + 8 Stmitmo Met 

KwmnM8tnl_ 2856m 288 + 2 Rota 

KStWtMbitimyU 105601 612 + 12 Mad, 


Traded Hen wBxy 

— 10501a 318 - 1 

— 1052m 1530 + 48 

I. 1857m 252 +4 

— 958m 908 + E2 

651m 1538 + 30 


T Chief price changes 

V/l H On pence unless ottierwlse indicated) 


RISES: Interlink Express ..565 +15 

Treas-TOpc 2012-15 £S1K +%» Jaguar 546 + 7 

British Mobair 234 + 8 LWT- , MQ +57 

Cable & Wireless -.458 + 7 MAI 656 +18 

Cont Microwave -285 +37 Plessey 189 + 5 


Rothmans B am 

Spectrum-. 72 

Stewart Wrightson 553 
Taylor Woodrow _440 

Thames TV 489 

Tyne Tees TV 621 

Wellcome 462 

Willis Faber 372 


+23 FALLS: 

+16 Acorn Computer _ 53 

+M BPB Inds. 354 

+ 12 Burmah Oil — — 567 

+38 HammersonA 670 

+38 Laing (John) 360 

+25 Redland 500 

+ 14 Rowntree 550 


X Y 
84 20 20 
041 2D*, 
3503020 M*, 
1064 «% 
n 100 17% 
28 485 12% 


YkMfs 52 21 811 


ZhmUl 1-44 
Zowtvn 


90 39% 
3400 «% 


z 

30 20 +1 

19*4 20 + % 
13 14 +1%, 

13 11% 

18% 17%+ % 
12% 12*2“ % 
»% 37% - % 
39 38 - % 

07, 16% *2 


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44 


.( i 

0 Financial Times Friday September 11 1987 yS' 

NEW YORK STOCK EXCHANGE COMPOSITE CLOSING PRICES 


12 Month 
High Lm 
37% 2ft 
52 22 

31 »* 16 % 

22% ft 

10% 63* 

«e v, 

65V 50i, 
27% 2 >'b 

ir, 8', 

73% 34% 
20 M, 
67 41 

28 24U 

163, S3, 
10% 61* 


23% 19 

19% 11% 


2ft 12% 

24% 12% 


56% 47 
11% 5>j 

20% 143, 

21% 17 

15 10% 

68% 53 
83% »% 

26% 18% 
5% Z% 
537, Ji% 
36 173, 

15 7% 

20% 15% 

15-32 % 

28 25% 

10% 9 

98% 83 >j 

277, 17% 
28% 13 % 

24 13% 

65% 40>, 
37% 18% 
30 16% 

403, 22% 
92% 48% 
2 <% 11 % 
201, 10% 
88% 45% 
34 28 

491, 35% 

100 52 

SO M% 

25 19% 

44 24 

481, 37% 
3% 2 

37% 13 

33% 23% 
62% 50% 

64% »% 

32 27% 

29% 11% 
45% 32% 
41% 18% 

160 91 

25% 6% 
60 40% 

347* 31% 
118% B3% 
26% 21% 
31% 23% 
25% 20% 
35% 30 
24% 14% 

ft V? 

57 36 

31% 25 
40% 25% 


Ek'o> 

P/ Sb On* tar. 

Suck Dn. YU. I 10Qx ftgb In* Cbm Ctaa 
AAR » 00 1.5 SO © 34% 33% 34% +% 

ADT X 13 29 1400 51% 51% 51% 

AFG * .18 O JO 379 287, 27% 27% 

AGS S 19 269 20% 19% 20% 4-% 

AMCA 240 9% 9% 9% 

AM Ml 689 7% 7% 73, +% 

AMR 12 4220 SB% 52% 57% -% 

AMR Erf Z- 67 10. 1 25% 2S% 25% +% 

ARX a 11 155 11% «% 11% +% 

ASA 2a 3.1 1529 661; 647, 64% -% 

AVX 32 1.7 39 1522 19% 1B% «% +11. 

AblLab 1 1 6 24 50© 61% 59% 60% +% 

Abilltrf g © 2S% 24% 243, -% 

fioiteC .40 33 13 652 12?, 12 12% -% 

AcraaE.32b 34 © 44 8% 9% 9% + '« 

AdaEx 3 42a 16. 1© 21% 21% 21% +% 

AdmMe 04 20 9 44 113, 11% 11% + % 

ArfvSyasa 23 18 304 27% 27% 27% -% 

AMD 7494 21% 20% 21% +1 

AMD pi 3 £7 BS3 52% 52% 52% +% 

Adobe 688 9% B 9% +% 

Adob pi 184 9.8 6 19% 19 19% -M, 

Adob pf 2.40 11. 2 21% 21% 21% +% 

Advent ,12a 1.0 9 124 IS 11% 11% -% 

AemU 2.76 4.6 9 6821 BO?* 60% 60% -% 

AMPb s 32 5 22 549 71 © 70% +2 

Ah mantfS A3 7 2096 20% 20% 20% + % 

Aiteen 48 3% 3% 3% -% 

AtrPnt 1 2.1 21 2091 48% 47*, 48% +7, 


Ck'0> 

12 Mood) P/ Sb Ctaw Pm. 

i High In Stock Ob. YM. E lOOc Iffgli (n (bale Cbn 
Hi% 8 BluChpt.Ofie .7 37 83, 8% 8% 

59% 42% Boeing 1.40 20 13 3975 50% 4ft 50 +% 

86% 55% BofeteC 1.90 24 21 51? 80% 80 SO 

: 66% 51% Botoe ptC&SO 58 28 BO 60 60 

297, W% BaltBrs 06 3 © 21% 20% 20% -% 

I ©7, 40 Bardeifl© Z2 17 957 58% 57 57 - 7, 

2S% 16 Bormn&22 13 8 U 17% tr?, 17%-% 


12 Month 
ftigk In* 


Oi'w I 

Don Pm. I 12 


Cb’ga 

* P/ Sb Ocsc Pm. 12 Monlb 

low Slack Ob. W. E IQQsKgb Un OwteQaa SB* m W. 


25% 16 Btxmn&g ? 13 
18% 12 BCeKsn70e 5 1 
26 19% Boated 1.78 8.5 

1© SBi, BosE pfflfS 10. 
17 14?, BosE pn.48 99 


12 BCanan 70s 5.1 96 13% 133, 13% 

19% Boated 1.78 8.5 6 651 21% 20% 21 +% 


AlrbFrt .60 23 It 74 26% 28 26 +% 


Abgasn 21 12 1Z?, 12% 12% +% 

Airtse nZlla 12. 30 17% 17% 17% +% 

filMQHn 1 & & & 

AlaP pn.B4e 8.7 8 27% 26% zr% +1 

AlaP dpi .87 0.7 16 9 d 07, 9 

AlaP pfB-28 99 z130 84 833, 83% -% 

AtekAIr .16 J M 1629 21% 211, 21% 

Alberto 24 19 20 92 241, 23% 23% -% 

AJbGuUM 12 17 57 21 20 20% +1 

AlbtsnaM 13 19 Z77 627, 821, 62% -% 

Atom s -GO 1.8 20 1293034 32% 33% + W 

AtoS s 18 337 26% 261, 26% +1, 


1© 881, BosE pfB08 10. ZI700BB U88 © -1, 

17 14?, BosE pn.4B 93 15 15% 014% 14% -% 

43% Z71, Bowatr .© 21 24 1721 37% 37% 37% +% 

42 32 Boost 1.© 4 2 21 97 ®% 37% 377, -1, 

56% 33% BrisMsIM 23 21 55© 49% 48% 48 + ?, 

33% 30% BrllAir 0Oe 25 24 32% 32% 32i, + % 

32% 23% BGas2pp.7Se 2.7 3953 2B% 38 2Bi, + % 

3% 2% BntLnd 51 3% 3% 3% 

an 36 BTHPr 278e 29 14 71© 72% 71% 72 +), 

21 IB BritP wt 771 17% 17% 17i, + i* 

55% SB BrilTeflS/a 39 21 148 43?, 43% 43?, +% 

11% 7% Brock n © 2© 9% 9% 9% 

48% 22 Brckws X 24 74 158 39% 39 39% +% 

291* 26% BHP n .62r 21 369 29% 29% 29% +% 

28% 22% 8klyUGT06 63 10 84 24% 24 24% +% 

30% 26% BkUG pI247 93 5 27% 27 27% 

24% 16% BwnSh .40 1.7 32 © 22% 23 

44% 31 BrwnGp.50 30 16 2© 40 39% 39% -% 

35% 18% BrwnFaAO 12© 38©© 31% 32?, 47, 

30’, 13% Bmwh B .30 11 17 4415 28% 27% 28', +11 

44% 25% BrshWl 00 10 © 282 38% 38% 38% +% 

261, 19% BuckeyA© 90 10 241 24% 23% 24% +', 

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,JM «« «•».%. 2+S 1 Continued on Page 45 


45 


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. Financial Times Friday September 11 1987 0® 


NYSE COMPOSITE CLOSING PRICES 


AMEX COMPOSITE CLOSING PRICES 


» ss a*wi « ia> 

28% 16% PDopErtA4 

IF* 11% PepBys 
4314 .24% Pap*Co68 


■ + S ® 

®b -67% 


Ota 

12 Ibid . P/ St* OnaPm. 

Low Stock Ob. YHL £ IDOcHgb law OmmOom 

Continued from Page 44 

»% as' Pom* prl.GO 4L4 ••' TO- 35% 36 * Off, +% 

» S3 PemvwtiO 3.344 664 -673. fiff, ©% 

333* IPs PoopEft.44 7.4 11 354 W, 19', 10% -% 

IP* 1TJ 1 PepBys . .39 4*9 17% 17 17% + % 

«2V| 3«b PapbCofiS 1.7 30 'B707 3B14 38U 30 + U 

13b ’Ob PerfeF Rj$a 79 38' 47 11b IT, 1Tb .-% 

41b 29 PwkS .so 1.7 3573 35b 35 +% 

8b- 9b Pnnm40o 3213 537 7* 7% '7%' '+%" 

iob 8b Prt-P prtis 12. no Sb Bb 9b +b 

15b Bb Pwyor -22 21 » Wb «r, kp, 

377g 24b PMrtB .70 20 23 3299 3^9 34>< 35>| +b 

21b 17b Ptf>*r l» 2 98 -300 20S 20 20b *k 

33b S®% P«RS 2.578 Rft 72 30b 38b 30 

20 iPa PetRs ptl.57 as 1ft IP2 19b 16b ~b 

2<} 1 Ktrtnv .12* &4 19 17| 1b V t +4i 

77 5Bb pftzar 1.B0 20 17 4097 GP* fiflb SSb +b 

50b 175# PnttpD : 33 2905«Sb 48 49b +fl» 

S8% 51 PNpD.pl .3. 45 693 57 65b 66b +!*■ 

20 19b PW 140220 T1. 8 3315 21b 2Wg 2Db ~h 

45b 36 PhE plASBO &4 1200 45 45 45 

49b 39b PhE pB4 30 10 z120 42b 42 42 4-b 


1?Mn* 

tfiBk L*f 

321 A 35b 

39b 23b 
59b 38 
&t\ 33b 
68b 05 


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P/ Bt Ckn Pm. 

Sbck Sk YU. E lOOsHieh tow OamOw 
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SOBlPWI.ID 10 14 236 37b 3Sb 38b + U 

Sears 2 3ft 13 7208 539* 521, 531, 
SecPadBO 4.025 1115 39 38b 38 4-% 

SequaAlSe .2 16 79 841} 83b B4b +b 

Soqwai2a 1 Hi 33 B7b BSb B7b ♦b 

SvcCps.40 1.4 34 762 281} 27% 2&b +H- 

SvcRas 489 13b 11 12b +1^ 

Svcm8tn152o 5.7 22 393 26% 3614 20b +14 

Shaktaa.TS IBS 43 2«a 34% 24k 4-u 

'Sftftwfn .60 £5 14 127 24 23b 2c +*■ 

SN.eho.19a .7 050 26b d26i« 20b “b 

StMNr J4 1.2 21 44 187* 19b 19>) +'| 

Shear 3.79* 4J> IB 2984 09% 88% 08% +1'i 

Shrwa. .68 L7 14 544 33 32b 32b +7. 

ShWtwn 13 221 fib ftb fii, 


91b 60*4 
317* fii, 

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22>, Mi* 

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98b 28% 

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10»4 W4 
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54 43 Pt£ ia rv0040b 46b 4ftb +1 

137* 12% me pm i.4i 11. *o «?» 12% \#t +% 

13% 11% PhE p<P1.33 IV 93 12 11% TT* 

-08b . 73 PhE p»7R3 ia ZlflO 70 76 76 +1 

12% 11 PhE piOUft 11. 20 in, 11% 11% +b 

121% 110 PtlE 0114152511 25670110% 113% 115 -lb 

103 65 PI1E pacft.fiO 11. 2140 89b 08% 08% -b 

88 72%. Pie -pUT.OD TO. 2410 75% 75 75 

'19% VP, PHtSab .M- - 13 47 Mb M% 14% -b 

1»% 63 PhHMr 3 2.6 17 18440115 112% na%43>| 

2370 13 Phflpta..44 Z2 16 552 20% 20 20%+% 

27% 18b PhilGI .00* 31 12 687 2S> 3 25>, 25% -»% 

1S% PWVH 9 2ft 1.7 13 127 17 10% 10% -% 

17 PtitV Wd 338 17 digs, T0% -% 

5% Phtop a 116 0 5% 5»i +H 

4H, PtodAv -32 .5 18 2482 09 88% 88% -% 

53', PiedA ft 39 60», 667, » 8 -% 

197* PtadWa.32 14 11 424 25 24% 2*b 

07, RMrl .00 ^ 29 960 13% 13%. 13% -'1 

7% PUtf1fl-27o 13 332 0>, ft 8% 

7% PiiflPr n.04e J 0 1S2 8% 8 ft 

3% Pitsby* 1 13 20 3426 43% 42% 470 +% 

27% PfnWst2» 9 6 8 963 29% 2B>a 2»»4- + b 

221, mornELia* H05 W 43 42% 43 +% 

29% PfmyBs.Tft 1.720 859 40% 451, -45% -% 

114 Pta« PI2.12 1£ 1 180b 100% 100% 

10% Ptttsta . . 01 577210% 15% 15% 

181, PtaO ol 20 2510 20% 20% 20b +, i 

22% PMnsRtBa J S7 208 27% 27 27 +% 

15% Ptantm .16 BMW 20% 20% 20% -% 

6% Playboy 20 71 15% IS 15 +b 

23% PtaMV la 11 13 9 31% 31% 3T% +b 

4% PsBoPd MS 0% 6% 6% +% 

27% Petard ■ .60 17 18 4947 35 34% 34% 

9% PopTala.44 2.010 320 23% 22% 221? +1, 

11% Portec 7 13 12% 13 +b 

22% PorlGCIJK TT 13 681 25% 25% 25% +% 

271, POrta p)2.00 10 3 28% 26% 28% +4 

25% PoUtchs.84 23 12 270 34% 337 a 33», +% 

21% PotmEal.30 -6.7 11 2160 22% 22% 22% 

17i} Pramkn .32 IB 279 27% 27% 27% 

» Pronin 44 1.027 20 43% 431} 43% -% 

23 Primffc 1.30 15 8 400 24%, 231} 28% -V 

15% PrimaG 25 476271, 2B>« 271, +r 

24% PrmeUOB .2 25 680 447, 43 43% -7, 


z120 42% 42 
z40D 44 43 


27% 18% PhdGI .00a 
M3. 9% PMrPM .80 
2^ S PMPl P1L73 
26% 15% PWVH a 2ft 

18% 17 Ptitv wd 

13<} 5% Phterp n 
71 4H, PtodAv .32 

71 53', PMA N 

29 197* ptadHa.32 

14% 63, PMr 1 .06 

81} T% PUsRg -278 
15% 7% POflPr <1.040 
487* 39a PHaby* 1 
32J, 27% PfnWs>28f> 
44% 221, PtomELIft* 
501, 29% PftnySa.Tft 
193 114 PtaS pUL12 

10% 10% Pfttstn . . 


S% *4% -V 

«% 10% -ij 

dim, 18% -% 
5% 6». +% 
66% 88% -% 


ShOOtwn 13 221 8% 0% Bb 

SnMU 1 28 1.9 25B 1«* M% 14% 4% 

SHMPafl.TS 7.7 IS 151 23 22% 23 4 

SflnlAps .12 1.0 0 4ft T2% 12 12 -% 

SgnAppUGD 2.9 1 56 56 56 

St9"*» ’32 3.7 32 419 363, 36% 36% 

Stnaw AW> -B 24 701 48% 49% 48% 4% 

Smgr pUM 93 2 3(7% 37% 37% 4% 

Stzdaml.56 7.0 OSS 20 18% 20 -% 

SkyfUM .48 2.0 17 >664 17% 17% 17% 


Skyftna .48 

29% 71 SUB8TY 11 11 22' 22’ 22' +% 

m 2% «JSmta» 376 O'} fl% O'} 4% 

72% 30% SftrtS al.SS £9 14 ,6144 58% 57% SB +% 


71% 181, PtaO on. 20 

33% 22% Ptam*fta50 


33% 22% PtamaPOM 
25i, 15% Ptantm .16 
16% 6% Playboy 
40% 23% Plaaay Is 
9 -4% PagoPd . 

42% 27% Petards .60 
271, 8% PopTala.44 

17% 11% PorttC 
34% 22% PortCCI 06 


41% 25% Potllcha.84 21 12 270 34i 

27% 21% PotmE 01.30 -6.7 II 2160 229 

29, 171} Pramkn. 32 12 279 279 

471, 26 Pronin 44 1.0 27 20 431 

29% 23 Prtmrfe 1.30 15 8 408 24! 

31 15% PrimoC 25 407» 271 

48% 24% PranoMOB .2 25 680 443 

21% 161, PrmMIBI.Ma 61 23 173 

53% 35% Primcasl.60 afi 13 9134 46 

91% 02% Prime -pt 3 319 12 77 


33% 33% +% 

22% 22% 

27% 27% 


11B% 109% Prime pf137S 13. 


103% 067s Proc!Q2.70 
2l7g 15% Pnilto -3 


680 447* 43 43% -7* 

23 17% 17% 17% -% 

5134 46 43% 45 . +3 

12 77 78% 77- • +2" 

1 in no no 


37 265 

10% fl% Prolnen.lTe 2.0 

48 £7 PnMor 1.40 £2 

1% 1% PruRIC 

S', 57* PruRl .010 IQ 

227* 18 PSifCol 2 9.0 

25 21% PSCcfl p*2.TO 8.3 

18% 12% PSind 

16 HJ% PSM ptBUM 7.4 

15% 10% PSIn ptCI.08 SL4 

KM 781, PSIn pff&52 Q7 


Proaa2.?ID £8 51 4488 87% 08% 9T* *V 

PrdRs 12 19 22 463 19, 18 '18% +% 

ProgCp .40 11 12 20 32% 31% 32% +% 


£0 402 0% 8% 9# - % 

£2 52 44% 4ft 44%+% 

3 113 7% 1% 1% +% 

IQ 70 8% 0 0 -% 

9.0 8 1357 207, 29% 20% +% 

9.3 28 2S% 22>« 22t, 

0 1007 15% 16% 16% — % 

7.4 zSO 14 14 14 

£4 Z200 11V 11% H% 

Q7 zOOOOO 88 66 

2 3SB 4% 4% 4% -%, 

zlOO 10% 10% w% -ij 

23 m, 10% m +% 

2 18% 16% Mb 

10 13% 13% 13% +% 

7 121, 12% 12% 


9% 3% PSwttH 

217* 8 PSNH pf 
23% 8% Pm pB 
29% 13*2 PNH piC 
27% Wa PNH p(E 
39a O', PMH ptQ 
39% 26 PSVNU212 11 
30% 23% PSEG s . 2 0 2 
Mil, 81% PSEG pf7-80 05 
88% 78 PSEG pf7-52 02 

370 Z% PubHdc . 

2S>b 18 Pu0Mo SO JB 
38% 12% PR COM A 

23% is% PuflatPiro ae 

9% 67, Pol Iran .12 -' 1.4 

17% 10% PuKaHoK 10 
10% 9% PuinHit.070 J 
7% 5 Pyro 

20, 11 QUS. 


S’* S! a 

60 3714 

461} 2Sk 

a x 

35% M>4 
30% 10% 
44% 38 
27% 247* 
22% 17% 

61 26% 

31% 241, 
37 20% 

29 219, 

41% 32% 
BO 47 
38% 30% 
15% 10% 
80 % 44 

11% 8 
46 381, 

30% 29 
28% U 

a a 

IF 25% 
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20 12 
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38>, 22% 
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101% 40% 
3«% 23% 
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317, 20% 

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56 27% 

211 , K% 
38% 20% 
36% 24 
62% 40 
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47, 3 

UP, 12 % 

09% 41% 

37% 27% 

16 7% 

87% 48% 
65% 24% 
12 i, 67 * 
40 20% 

17 13% 

1 2 

3% 21, 

24% 1B% 

46% 26 
127, 7% 

10% 8% 
16% 9% 
207 * IB* 
73% 49 
64% 48% 


Smoekr .72 
SnopOn.75 
Snyrior 1-20 


Son ol 2 59 

SE»yCp230 .7 
SocftJn 

SourcC 150 9.2 

SrcCp p(240 95 


1.3 21 SO 55% 54% 551, +1, 

1.0 23 415 42% 41b 41% -t-% 

12. 39 141 m, B% 9% 


SJertnslja £2 M 8 207* 20 U 20% - 

SoMwnib £2 25 43 46% 4ftt« 48% + 

8O0tBkS.8B 32 32 887 27% 27% Z7% - 

SCalaEM 7 5 11 7646 32 3P* 31% +% 

SouthCftM 857 5650 23 22% 321} - % 

SohNGaiZ 00 11 42 35% 35% 35% 

SNETI £88 54 12 171 53 52% 5S»a +% 

So«y pi 2.60 £5 2 30% 30% 30% - % 

SoUnCo.BO 61 42 I3i, 12% T31* +% 

Souttndftlt 13 1083 76% 75 76 + % 

Soumrk34fl £4 9 2579 10% 87, 10 +% 

Somk p(4.S1 12. 14 40 3#0 40 

Somfc pK.31 £5 273 27% 27 271, +%■ 

SwAH 13 .7 30 1404 201} 13% 197, 

SwtGoal.aS 12 12 296 24% 24% 24% -% 

S**®0Oa2.32 £0 12 6438 38% 38% 38% -%, 

SwEnr .36 24 77 65 ZUg 23% 23% +%. 

SwtPS £12 £1 12 2288 26% 26% 26% 

Sparun.52 £3 13 12 157, 15% 157, +%. 

SpcEqn 48 iff* 18% 18% 

Spragim 1521 187, 17% 18% + H, 

Springs .04 20 13 882 33% 32% 32% - P 

SquarD1B4 32 16 729 58% 577 a 50% + %| 

SquH3t»1-20 1.2 21 3888 89% B7% 89% +31! 

Shday £0 £7 22 082 30% 2S% 29% 

Siaiay pf£50 £6 70 53 52% S3 I 

StBPnt .60 £121 1M9 28% 29 291, *%. 

SlfBk n 2G9 8% B% 8% 

SlMotr .32 1 7 14 130 IN* 18 18 -% 

SWPaes.eOi S3 10 143 11% 11% 117, 

StdPrdaJO £1 11 248 3B7, 301, 38% -% 

Stands* G2 £7 14 SS 18% 18% 19% +% 


SoUnCo.BO 
SouHndSt) 
Soumrk34a 
Somk pt4.8i 


SwtGBd.2S 
£wBatl8£3S 
SwEnr JO 
SwtPS £12 
Spartan .62 
SpcEqn 
Spragan 


12 Monk 
UUt Low 
321, 19% 
39% 19 
SO 23% 
103% B8% 
03 S3 
5% % 

38b 13% 

47% 20% 
73% 40% 
481, 33% 
32% SO 

ip, 7% 

31% 22% 
« 45% 

29% 27% 
28% 21% 
95% 74% 
84 78 

22 16% 
88% 52% 
175% 117% 
27% W* 
48% 2«, 

81% 48% 
6>, 1% 
22% 15% 

so a 

2S% 16% 

35% 21% 
25% 90 
T7 13 
73% 12% 
40 32% 

32% 22% 
12b Bb 
15 0% 

?% lb 

53% 34 

!*’ -*l IS w% 

5S% 46% 
10% 7% 
11% 8% 
60i 2 38% 
33% 25 

40 ' °l a 14 

2?» 2 S, j_ 4 ( 10% 10 

' 23b W% 

24% «% -h\\L £? 4 

38V 3«». -5.1 g 

22% 9 
45 20% 

53% 27% 
48% 34% 
12% 9 
36% 22 
23i, 78% 
2B% 24% 


338 34% 33% 33% -7, 

1057 347, 34% 34% 

21 27% 27% 27% +% 

20 38% 381, 38% 

17 25% 25 25% 4% 


Suck Ov. 1 

U6T • 1.20 
USX UO 

USX p(4£4e 
USX pMO.75 
USX pr £50 
USX art 
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UNPratJO 
Unilwr a ' 
LhW • 
UCmpal.ifi 
UCflrb 1.60 
UnionC 
UnBaclBS 
UnEI pf4.5D : 
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UnEI pt£I3 
llnB pT744 
UE1 plH ft 

UnExp 1.02B . 

UnPac 2 : 

UnBc pr/ -25 
UniadF AD 
Unlay* » .92 
Unlay pt£7S 
Unit 

tMU .10 
UnBmd.80 
UCbTVs 
umum £32 
Ullkl pr£20 
Uinu |d t90 
UnrandOib 


lOOtHgk 

948 28% 


UJetBk .90 

UKtng n 

UtdMM 

UPWn 

UsatrG .12 

USHwn 

USLO03.88 

USSnoa.48 

USWos£28 

UnStCk 

USRk ptIJO 

UnT«CM.40 

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19% 11% Rothch . 237 1ft M% M7, 4% 

11% 3% Rowan 1 3825 9% 9% +% 

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43 2«, Ryder -52 1.4-18 1571 37% -30%. W -% 

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33 15 Rytand .40 1.7 9 811 .23% 22% 231, +% 

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101% 54% 
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■Brdi.18 
Teams JO 
Teltey p> 1 


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8i eu4 3t% . aoi 4 ar, ad. 


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Tonnco£04 5 l5 0959 547, K*, 547, + 2V 

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vJTexKAg 17 4364 40% 39% 40 4% 

TxABc .NS IS 9% 9% 9% -% 

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TmdndJOb £4 18 33% . S3>, 33% -% 


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22% 18 RckCtr L80 
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30 3*% Boh r 

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397, 19% 
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ThmMedO 

ThorincHBa 

TkJwtr 

TtHny n 

Tigarin' 

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Tlmkan 1 

Titan 


40 1 7% 7% 7% 

27 1822 34 22% 24 4% 

£7 M 440 82% 817, 03% -% 
£2 15 77 21% 20% 21 4% 
1.8 22 3D 221, 22% 221, 

.1 14 a 20% 20% 20% 4% 
»3 8% 8% 8% 

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S 7G9 1S% 15% 13, 4% 

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Titan 17 39 6% 

Titan pi 1 £7 13 11% 

vJTodSUS) 58 57 5% 

vfTdS pf.77] 5 7% 

Tokham48 1.8 a 221 27% 

ToiEd pf£24e 10. SO 22% 

Toed pa.72 1£ 5 30% 

TolEd (K3.75 12. 22 30% 

ToKd p13A7 12. 8 29% 

ToiEd p (£M 10 20 23 


n 71% 72 -% 

6 % 6 % 6 % 
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7% 7% 7% 4% 

27% 27% 27% 4% 
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29% 29% 297, 4% 
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TolEd pf2J1 It 8 20T, 20% 207, 4% 

ToUBr s . M . 384 10% 107? 10% 4% 


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48% 23% 
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WalCSvJO 1.4 10 
WaRJ 5 120 £0 15 
WBkJ pi 1.00 1.8 

WaraC .40 1.1 22 

WmC pCias £5 
Wamrt.1.80 22 21 
WMhGftJO 7J 10 
WshNeX-OS £1 13 
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wastes AD A 23 
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WabbD JO J 9 
WBtagRJO 62 20 
WafaMs .44 1 J 25' 


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Waff pi 3a £1 -. 
WMFM 2 1£ VI 

Woody* 3A ZA ' ' 

West a .a 1.518 
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WatPtP2A0 £1 
WMcfTgJO 13 
WCNA 
WCNApT 

WB3a pll0O 11 
WatnSL -24 U 12 
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WnU pS 
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WatgE 172 £5 M 

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Wtiripiai.10 £814 
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WkJean 7 

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WHcfc p!A£5D £8 
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WytaLb J2 
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0848 301} 
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2927 507, 
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3164 357, 
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1600 22% 
43 25% 

408 36% 
548 53% 
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559 18% 
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3384 06% 
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5100 51% 
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177 48 
192 12% 

67 3% 
378 24% 

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81 227, 

108 40% 
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30 6% 

27 187, 

170 56% 
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381 19% 
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85% 66% +%| 
718, 61% +3J 
237, 24 
35% 35% 

267, 271, +1, 
44% 45% +T- 
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21% 21% 

25% 25% +1, 

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371, 3D +U- 
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Actmds 

Acuan 

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AdiaSv .10 

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Agnicog JO 

AlrWtac. 

AlnFdta .101 

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Altos 

Amcaai .44 
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ABnkr JO 
AmCerr 
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AGraal J6 
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ANOna 122 

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ApidBlo 

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Archive 

ArgoGp 

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Sabs Utah law Ian Chag 
(Hadti 

18 200 20% 27% 28% +1 
23 161 M% 137, t4 
101371 17% 10% 17%+ 7, 

26T 15% 15 15% - % 

129 1 IB 18 W + % 

42 437 21% 21% 21%+ % 
» 530 21% 20% 21b + % 
16 100 12*, 12b 12% - % 

31 24 a% 27% a% + % 
021272 36% 33% 30% +2% 
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23 131 14% 14% 14% + % 
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m 285 10% 10% 10%+ % 

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M 202 17 18% 16% - % 

11 381 16 17% IS + b 

M 268 61% 60% 61% +1% 
11 1 23% 231, 23% + % 

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25S S% 8b ff,~ % 
24 1437 13% 12% 13% +1% 

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1000 0 7% 7% 

6 31 13 13 13 + % 

134 033 9% O', 9%+ % 

I1U 7b 9% 67, 

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32 103 17% 17% 17%+ .b 
5x193 35% 35%, 35% - % 
0 797 lfi% Iff, W% 

209 21% 21% 21% --. 

161009 Iff, 12% 13 + % 


Site Kgb Law Lm Ctag 
(Had*) 


Salas High Law leu Dam 

HMD 


100443 26% 25% a + % 

4» Iff, 15% 15%+ *a 

1226568 22% 21% 217,-% 
436 1696 30% 3ff, 30% 

S 545 20% ff% 19% — % 
19 272 57, 5% S*« 

73 6 117, 1*7, Iff, - % 


21 16% 18% 16%- 7, 

373 15% 14% 15b + b 

18 235 22 21% 22 — b 

17 368 11% 11% 11%+ % 

333483 20% 187, 20 - % 
8 123 30% a 3ff, 

40 12599 54% 53% 53% +1 

447 1ft 15% W 

43 009 a 26b 29% +1% 

1930 291} 27% 29%+T% 

44 502 12 11% 12 + % 

11 462 43% 431, 43%- % 

101 18% 16% 16% 


Aahkxu 

AUGUalJO 

A0Fh? JO 

AdRas 

AdSeAr 

Aulodks 

Avmok 


25 110 21% 21% 21%+ % 
4 1263 S% 5% 5%+ % 

102452 Mb M 24% 

11 436 22*4 217, 22 - % 

78 40 10 9% 10 + b 

13 301 25 Mb Mb - % 

630322 13 12% 12% 

42 BIO 26% 27< 4 28b +1% 

a 317 14% 14% M%+ % 

B B 

090 6% 8% B%+ % 

12 44 9% 9% 9% 

50 52*« 51% 52 

10 IS 14% 14 14 

6 80 10% 177, 10% 

21 90 »% 10b 10%+ % 

11 45 27i, 20% 26% 

7 IS » d28% 2ff;- >4 

10 102 » Sb S%- % 

151101 12b 11% 12b + % 

111997 32% 32% 3Z% + % 

11 14ft 13% 13% 13%+ % 

372 13% T3 13b + % 

17 TO 237,022% 22% - % 
17 115 M a% 23*,+ % 

ft 418 13% 12% 1ff,+ % 

19 149 50% 49b 491, - % 

0 493 17% 16% 16% - % 

ft IS 45 44 45 +1 

10 52 7i 2 7b 7% + % 

1ft 229 Iff, 15% W + b 

123 12% 12 12 

208 7% ff, ffa- % 

7 353 25% a », 

25 >3770 3860 3770 + 20 

23 525 53% 51% G3 +2 

B 'ft 77, 71, 71, — 1, 

13 54 24% M M%+ % 

12 422 10 9% 9%+ b 

49 38 9% 6% 6% + % 

93 2% 2% 2% 

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42 723 u29 27% 28% +1b 

138 9% 9% 9% + 7, 

IS 572 27 26% 26% 

15 11 30% » 301} + % 

129 36b 35% 35% 


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BKfi-yB JO 
BaIBcps AO 
BnPncsIAO 
BnPop 1-32 
BepHw 126 
Banctac 
BKNE 124 


BnkgCxr 
Badnit JOb 


58% 58% 
ff, Z>4 “b 
19 Iff} +% 
19% 19% 


Tonka .09 A 10 991 18% 19% 19% +b 

TootFU 23 .7 21 a 31% 31 31% +% 

Trchfflh t 32 11 873 31% 30% 30% -% 

Toro a AO 12 M 272 20% 20% a% +% 


24% 15% Rymer 

iff, 10% Rymer pfL 17 10. 

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13% 0% SL Ind .17b U li 


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20% 11% S&UC n 
19% 12% Stehw- .04 
1«B 11% SabnflIAOa 
197, 13% aadSc 
39% 10% SMM a 24 


IB Iff, 10b «b +’4 
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SSS- 

Ind .17b U 15 42 117, 11% 11% -b 

B.W £4.15 3D 407, 38% 401, +Ui 

n 13 24% 2*1, 24% 

.04 J - 37 Iff, 16 Iff, +%| 


: !. •*' 

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a 19% SUoLPaL32 £7 
137, ff< Sated 

89% . 51 SaflleM .36 .4 

44% 307, Salomn.M £0 
38% 30% SDtaGfl.® 72 
9% 7b SJoanB41e 4J 
12% 8% SJuanRSc 

33% 2ffg SAnHRB.04 7.1! 
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49% 29b SaroLos 1 2.3 

51% 48% SaraL pl£75a 5-5 

in, 14 % Shore jo i.t 

231, 15% SMEP 1 £3 

0% -lb Savin 

40 30] SGANA2.32 72 

10 ft Schlr n 

5ff, 34% SchfPU" 1 £0 

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201, 0% SdAd .12 7 

84i, SS, ScoUP 12G . L7 
157, 12 .Scotfyc .62. 3.5 

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6 77 10% Iff, 1«% +% 

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fi 33 10% 10% Iff, 

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42 21 134 9b 97* fib 

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7.1350 TO 28% 277, 20% +% 

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73 TO 264 32 3V, 3F, +% 

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2.7 4037 «% 45 4ff, +% 


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34% 147, 
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241, 13% 
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1ft 10 
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561, 30% 
29% Iff, 
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Tosco pi229 7.9 
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vfTwtapt 
ToyRU 

Tracer .40 1.7 

TrametlAO 1£ 
TWA 

TWA pi £25 M. 


11 403 2% 2% 2% 

7.0 40 31% 31% 31% -b 

473 10-19 7, 7, 

W 1% Vm 1% 

31 3453 36% 37r, 38 +% 

1.7 S 519 23% 227o 23 +% 

1£ SO 11% 11b 11% 

9 49 32% 32*4 3Z% +% 

M. 67 Iff, 16% IQ's 


95 SI 
59% 53b 


S Sa 

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X Y 

Xerox 3 £9 17 
Xerox pBAS 10. 
XTRA .64 £2 23 

XTRA pTLM 72 
Yoridn 14 


Transnd.70b 4.1 8 3068 431, 42% 43% +1 


Tranlrx£a £9 

TmCtfegLIS _ 

Tmscep ft -420 S% d 9% 9% 

TranscdJB . 3A 472 39% 39% 39% +% 

Trmws pi4.7S £6 16 49% .49% 49% -% 

TranExl.76 IS 27B T2. 11% 117, 

Transcn 2S 5 4%. 47, 

T ravler228 5.2 8 1757 44% 44% 44>, - % 

Trav pi 4.16 72 34' 22% 52% 52% 

TrICoo 5.310 M. 22S 33 32% 33* +h 

TriCn pf£50 £2 6 30% 30% 3®, +% 

Trtaht * .12 .3 15 902 40% 39b 39% -% 

TrUnd pL12 A 1 31% 31% 31% 

Trlbun S .60 IA IB 850 437, 42 42% ~1 

Tncntr 46 37* ff, ff* 


16 237, 23 23 

ISO 13% 13% 13% 


14% 9% 

33% «% 
13% ff, 
27% 10% 

30% 17% 
70% 0% 


Zayra AO 1 J 10 
Zamex AO £2 8 
ZenithE 117 

ZenUb 

ZenNd JO £7 13 
Zara 26 L9 19 
Zumkia-00 £618 
Zwekl n.65e 6A 


z 

3660 77% 
671 53% 
IK 28% 
43 27 

140 30% 
433 5% 
2350 27% 
7 12% 

1814 291, 
2648 0% 
IK 22 
BO 16% 
410 27b 
BBS 107, 


BeyVw 

BeyBksiA* 

Beanie 


75b 77% +11 
53% 53% -b 


26% 27 +% 

297, 30 +% 

5*, ffa +% 

27 23% -+b 

12% 12% +b 
26% a b +% 


BellSv 
BaniSv 
Berkley JB 
I BerkHa 
Baeu> UB 
BovSvg 
BgSear t 


71, 0 +% 

21% 217, +% 


W% W% +b 
26% 2Tb 
■70% iff, -% 


Trilnd pi 12 
Tribuns .00 
Tncntr 


JO 1.7 88 168 30 


SiStti 

39b 39% -% 
31% 31% 

42 421, -1 

ff, ff, . 
29 29% +% 


Salas figuraa are unofficte. Yearly highs and lows reflect die 
previous 52 weeks plus the currant week, but notttie tatw* 
trading day. Where a spflt or stock dMctend amouding to 25 
per cent or more has been paU. ttw years high-low range and 

dvtdend are shown for ffw near stock only. Unless otherwise 
noted, rates of iMdands are annual dabursamanta baaed on 
the iawat dadvadon. 


SI 30% ScUraMJD- 2.7 4687 «5% 45 45b +% 

201, 0% SdAd .12 T .17 3W 17% 17% 17% 

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a-dvidend also exttafs). Ivwnnual rata of iWdand plua 
stock dMdend. c-fiqtddaiJng dhadand. dd-oded. d-naw yearly 
low. ft+fendand declared or pffd in preeedng 12 monlha. g- 
dtvidend In Canadian funds, subject to 15% norwosktero tax. 
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dividend meeting, k-dhndond declared or paMWsyaar.onM- 
cumutattre Issue with dMdends In arrears, iwww Issue In Ira 
past 52 weeks. The high-low range begins wim the saw of 
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matad cash ualua orv Bxxfiiddend or ex-distribution me. u- 
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.. Enjoy reading your complimentary copy of the financial Times when you’re staying . . . 

. in Madrid at ihe V .. - - . . .m Barcelona auhe 

Holiday Inn- Hold Miguel Angel. Hotel Palace. Hotel Prmcesa Plaza, Calderon, Hotel Diplomatic. Hotel Majestic. Gran Hotel Sarria 

Hotel Ritz, Hotel Villa Magna - __ 

FINANCIAL TIMES 

— Europe Is BusnessNewspaper — 

• , -■ • — — — 1 London • FraaUnt - New Vite f— *" ■— — — * 


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46 


00 


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Financial Times Friday September 11 1987 


F I NANCI AL TIMES 



WORLD STOCK MARKETS 


Looming trade 
figures fail to 
dampen Dow 


Rumours of fresh bond losses hit Tokyo trading 

. i ___ « i —<•■< J.wm OR AOrt'h 


TOKYO 


WALL STREET 


MARKETS in blue chip stocks as 
well as US government bonds man- 
aged yesterday to sneak in a size- 
able rally on Wall Street ahead of 
the much feared figures for the na- 
tion's trade deficit due this morn- 
ing, writes Gordon Crumb in 
New Vorfc. 

The Dow Jones industrial aver- 
age ended 26.7B higher at 2J57B.05. 
Advances led declines by 1,108 to 
480 as the NYSE composite index, 
reflecting the broader strength, 
rose 1.67 to 177.46. Volume quick- 
ened to 180.1m shares from Wed- 
nesday's 164.9m. 

Bond yields at the long end came 
back below the 9.6 per cent thresh- 
old despite further warnings that 
the Federal Reserve could be ex- 
pected again to increase its dis- 
count rate. 

Mr Albert Wojnilower, the influ- 
ential managing director of First 
Boston, said he saw "more than 
one" rise in the discount rate, the 
first of which could come by 
Thanksgiving. This would probably 
be of a half point, matching last Fri- 
day’s rise to 6 per cent 

Selling more exports has failed to 
compensate for buying more im- 
ports at higher prices. 'The trade 
deficit measured in dollars has 
grown further and is unlikely to 
shrink materially soon." Consensus 
for the July figure awaited today is 
SISbn. 

The stock market showed signs 
of taking to heart the more bullish 
of the recommendations being 


pushed out by industry watchers - 
for example Mr Joseph Granville 
has overnight told clients of his 
newsletter service that the sell-off 
the past two weeks had brought the 
market to a bottom which “should 
hold up through the balance of the 
month." 

Meanwhile, the regional Bell tele- 
phone c n m panie* responded unen* 
thusiasticaly to a federal judicial 
ruling approving their entry into in- 
formation services on restricted 
terms. The judgment would allow 
them to provide transmission ser- 
vices but not to supply information 
themselves. They also remain ex- 
cluded from telephone manufacture 
and long-distance phone business. 

Nynex, the New York area com- 
pany, advanced S% to 572%. Pacific 
Telesis firmed $% to $28%, Ameri- 
tech, at $93%, was up $%, but Bell 
Atlantic dipped $% to $73%. AT&T, 
the erstwhile parent who will thus 
have its operations largely secured, 
was $% higher at $32% in active 
dealings. 

IBM, at 5 157%, moved up 5% but 
was «E ain outshone. Digital Equip- 
ment, which has just unveiled an 
aggressively priced batch of mini- 
computers and workstations, re- 
sumed its upward path with a £7% 
leap to $189%. 

Other notable technology stocks 
were Amdahl, $1% higher in busy 
American Stock Exchange dealings 
to $42%, and on the Nasdaq market 
Apple, which gained a further $1 to 


$53% after a S2% boost on Wednes- 
day, approaching its 52-week high 
of S55%. The market's disaffection 
with the lowering of development 
sights at Cray Research continued, 
pulling the stock $2% downward to 
S94%. 

National Semiconductor was 
heavily traded, and S% higher at 
S17%. General Electric also moved 
near the top of the actives list with 
a $% gain to 560%. 

After the rescue on Wednesday of 
First City Bancorp of Texas, its 
shares lost nearly half their already 
minimal value as diehard holders 
attempted to get rid of the stock. At 
$1 the price was down by S%. Its 
two sets of cumulative preferred 
shares fared better, with the A se- 
ries Sl% down at $9% and the Bs off 
SIVi to the same leveL 
Others in the Texas banking sec- 
tor, mis ery ridden for so long, were 
the much healthier First Republic- 
Bank which was unmoved at $21, 
and MCorp, S% lower at S6%. 

The Lone Star State was able to 
provide a better feature elsewhere 
in the market, though, as Texas Air 
shot up another Sl% to S28% after 
an active $1 rise on Wednesday. It 
remains far below the year's peak, 
of 551%, however. 

As domestic carriers attempted to 
mark up fare levels on the most 
useful routes, AMR mi S57% lost 5% . 
of its recent rise and Delta firmed 
$% to $53%. 

The broadcasting sector accorded 
leading role to CBS, which soared 
$8% to $199 after settling its differ- 
ences overnight with. A. C. Neilson 
and its new ratings system. Dun 
and Bradstreet, which owns Nefl- 
sen, gained $1% to S68%. Elsewhere 
Lorimar-Telepictures, the produc- 
tion bouse which makes Dallas, 
gained SI on the Am ex to $16%. It 
has found more support since giv- 
ing up its network operating ambi- 
tions. 

In the pharmaceutical stocks 
Warner-Lambert picked up $3% to 
S81% white Merck, the sector’s re- 
cent dar lin g , fell back S% to $212%. 

Credit markets sought to build on 
their midweek stability, assisted by 
an easing in federal funds to 7% per 
cent Three-month Treasury bill 
yields came down six basis points to 
6.51 per cent The 2017 long bond, 
bearing an 6% per cent coupon, ral- 
lied *%i in price to 93%i where it 
yielded 9.57 per cent 


TALK that two medium-sized Japa- 
nese banks had suffered bond in- 
vestment failures similar to those 
of Tateho depressed the bond mar- 
ket and was partly responsible for 
sending equities lower in Tokyo 
yesterday, writes Shigeo Nishi- 
waJci of Jiji Press. 

The Nikkei stock average slid 
142.69 points to 24,795.24, reflecting 
falls in financials and pharmaceuti- 
cals. Volume shrank from Wednes- 
day’s 620.03m to 565.88m shares. 
Declines led advances by 549 to 356, 
with 131 issues unchanged. 

A wait-and-see mood set in as fi- 
nancial institutions and business 
corporations prepared to dose their 
books for the first half (April-Sep- 
tember) of this fiscal year. Inves- 
tors were also awaiting the an- 
nouncement of US trade figures for 
Tuly due today. 

The market was depressed by a 
slownslide of bond prices, triggered 
by rumours in the London, New 
York and Tokyo financial markets 


that two Japanese sogo (mutual) 
banks had suffered large bond in- 
vestment losses. Kinki Sogo Bank 
and Kansai Sogo Bank both denied 
making such losses. 

High-technology stocks were 
back in favour after moderate 
losses the previous day. Their re- 
turn to grace was helped by a Fi- 
nance Minis try announcement that 
Japan's August trade surplus fell 
from a year earlier, the fourth suc- 
cessive month it had moved lower. 

Mitsubishi Electric Corp rallied 
Y16 to Y615, NEC Corp was up Y50 
at Y2.050, Matsushita Electric In- 
dustrial added Y6D to Y2,46Q and 
Sony advanced Y60 to Y4.950. 

Stocks related to Nippon Tele- 
graph and Telephone Corp (NTT) 
drew renewed interest after NTT 
announced a plan to boost equip- 
ment investment in the next fiscal 
year. Fujitsu climbed Y40 to Y1.330, 
Nitsuko was up Y30 at Y1.930, Ko- 
kusai Electric rose Y160 to Y3,180 
and Matsushita Communication In- 
dustrial added Y130 to Y4.030. 
Ag ains t the trend, OKI Electric In- 
dustry closed Y8 down at Y845 after 
rising Y21 at one stage. 


Giant-capital steels and ship- 
buildings faded in late trading. 
They had a strong start after 
strengthening on buying by Nomu- 
ra Securities. Kobe Steel topped the 
active stock list, with 5312m shares 
traded, and finished Y6 down at 
Y299 after gaining Y7 at one stage. 
Nippon Steel, second busiest with 
41.53 m shares, was Y2dnwn atY345 
after firming Y6 in early trading. 

However, Mitsubishi Heavy In- 
dustries advanced Y12 to Y612 and 
Sumitomo Metal Industries Y4 to 
Y252. 

The financial sector plunged on a 
broad front Mitsui Bank lost Y90 to 
Y2.450, Nomura Securities declined 
Y90 to Y4.330. 

Among biotechnology-linked 
stocks, Takeda Chemical dropped 
Y60 to Y3490 and Yamanouchi 
Pharmaceutical was down Y20 at 
Y4£90. 

Bonds moved widely in reaction 
to the rumours of sogo banks' bond 
investment failures. 

The yield on the bellwether 5.1 
per cent Government bond due in 
June 1996 advanced from Wednes- 
day's 5.440 per cent to 5 .650 per cent 


at one stage due to small-tot sel lin g 
by dealers. It later fell to close at 
5.540 per cent in block trading on 
the Tokyo Stock Exchange. The late 
recovery was aided by an upturn in 
the December bond futures con- 
tract 

On the Osaka Securities Ex- 
change (OSE), shares continued 
their fall with selling centering on 
firms based in western Japan. 

The OSE stock average declined 
182.90 points to 25,52147, on an esti- 
mated volume of 9443 m shares, 
down 222 m shares from the previ- 
ous day. 

Nintendo slumped Y400 to 
Y1 1,300, Ono Pharmaceutical de- 
clined Y180 to Y7.620 and Torishima 
Pump was down Y50 to 71,370, 
white Tateho Chemical Industries 
rebounded Y26 to Y646 and Toa 
Wool Spinning and Weaving ad- 
vanced Y98 to Y871 


tures market recovered and ru- 
mours surrounded the Jardine Ma- 
theson group and a key property 
stock. 

The Hang Seng index rose 23.32 
to 3,600.96 in still heavy trading 
worth HK$2_lbn and the Hong 
Kong index was up 15.92 at 2467.62. 

Properties were particularly 
strong amid rumours of a planned 
link between Jardine Matheson as- 
sociate Hongkong Land, up 20 cents 
at HKS8.10, and Sun Hung Kai Pro- 
perties, 50 cents higher at 
HKS1840. Jardine Matheson added 
20 cents to HKS21.60. 


Kalg oorhe was down 26 cents at 
AS9.60. 

On the industrial board. News 
Corp advanced 50 cents to A52240 
in thin turnover and situation stock 
John Fairfax ended 8 higher at AS9. 

Retailer Coles Myer lost 26 cents 
to AS8.90 despite a 20 per cent rise 
in annual profits, while Boral recov- 
ered 4 cents to AS644. 


SINGAPORE 


AUSTRALIA 


HONG KONG 


BARGAIN-HUNTING helped Hong 
Kong share prices rebound from 
two days of falls as the index fu- 


A SLIGHTLY steadier tone left 
Sydney share prices mixed, with in- 
dustrials showing some good gains 
while miners were generally de- 
pressed by tower bullion prices. 

The All Ordinaries index lost just 
3J> points to 2,185.0. 

Among golds, Kidston lost 20 
cents to AS740 and Gold Mines of 


LETHARGY took hold of Singapore 
as institutional investors stayed 
away and prices finished mixed to 
lower in very thin trading. The 
Straits Times industrial index end- 
ed slightly down at 1,47541, a fall of 
6.36 points. 

A handful of blue chips edged 
higher, with Singapore Airlines 
back at its 1987 high of SS15 with a 
gain of 10 cents and Sime Darby up 
2 cents at S53.58. 


Trading in UIC and UOL was sus- 
pended pending an announcement 


Composure returns to 
Brussels after plunge 


EUROPE 


THE BELGIAN stock market re- 
gained its poise yesterday after a 
two-day free fall in which small 
investors had scrambled to un- 
wind speculative positions, 
writes Will Dawkins in Brus- 
sels. 

The forward index opened 151 
higher at 4,489 and dealers ex- 
pected it to end trading at similar 
levels. However, the general 
stock index, which represents 
shares traded for cash rather 
than dealt on account, presented 
a more gloomy picture, down 
1325 points at 5,006.62. 

Yesterday’s consolidation 
comes after several months of 
frenetic activity during which 
share prices readied record 
highs before falling back earlier 
this week. 

Brokers attributed yesterday's 
trend to the dollar’s new stability 
end a surprise recovery in the 
{nice of Socifefce Gfenferale de Bel- 
gique, tiie country’s largest in- 
dustrial holding company. Its or- 
dinary shares climbed BFr60 to 
BFr3,720, ending a seven-day de- 
cline, but were still far below the 
BFr4,155 peak hit in mid-July at 
the height of speculation that a 
bidder could be preparing to 
pounce. 


BO iafcHs QENEl=U*LE DE EOT fi T E 

CEnERRLE 

t3B>0W£ MWaSCHmj VMM BE3-GE 

l OOO B. Francs per share] 

4,1 ~ ^ I 


Blue chips rise on cue from dollar 








3 - 7 ?fS:S 


jj? >■ 

3.5 w 
15JUH 


10 Sep I 


The recent decline came in re- 
sponse to a more than 60 per cent 
increase in authorised capital de- 
signed to dilate potential attack- 
ers. 

- Other main share movements 
among the leading co mpanies 
yesterday included the Solvay 
chemicals group, down BFr300 ait 
BFrl4400, and Gevaert, an in- 
dustrial bolding group, down 
BFr250 at BFr7,750 on news that 
first half earnings would be low- 
er than expected. 


CANADA 


A FIRMER dollar gave support to 
blue chips on most major bourses in 
Europe yesterday while Scandinav- 
ian markets returned to their re- 
cord-breaking run after a one-day 
respite. 

Frankfort was encouraged by the 
dollar’s overnight recovery arid 
moved broadly higher ted by cars 
and electrical issues. The Commerz- 
bank index rose 25.9 to 1,9734 in 
moderate trade. 

Daimler continued its advance on 
news that it is seeking a stake in 
the French Matra group, adding 
DM8.50 to DMU0L BMW was up 
DM3 at DM755, but VW tost DM540 
to DM396. _ 

In electricals, AEG firmed 
DM1240 to DM34L30 and Siemens 
was up DM 340 to DM 044.50. 

Banks were broadly higher ted by 
Commerzbank which gained DM4 
to DM299. 

Bonds finned on a lively bourse 
as retail buyers returned to the 
market The Bundesbank sold 
DM178 An worth of paper after sell- 
ing DM98.7m on Wednesday. 

Amsterdam advanced across a 
broad front as buying interest 
picked up on the dollar's mild recov- 
ery. The ANP-CBS index rose 4.1 to 
310.4 supported by gains in blue 
chips. ... 


LONDON 


UK SECURITIES markets only 4J higher at 2^534 and the 
opened more brightly an a stead- FT Ordinary index was op 54 at 


lor US bond market and further 
success in stabilising the dollar. 
But UK investment institutions 
again showed little enthusiasm 
and the marhris were unable to 
extend their early gains. 

The FT-SE 100 index ended 


1.76L3. Business was largely con- 
fined to situation stocks. 

Government bonds began well 
but there was some concern later 
over stories from Tokyo about 
further heavy losses in bond fu- 
tures. Details, Page 42. 


Royal Dutch ended FI L50 higher 
at FI 284JH) after announcing an un- 
changed FI L50 interim dividend. 

Akzo was up FI 3.70 at FI 172JX) 
and Unilever rose FI L70 to FI 
13&50. 

I nsur er s performed well with Ae- 
gon adding FI 1 to FI 87.90 and 
Amev firming 70 cents to FI 6L30. 

Zorich reacted to the firmer dol- 
lar and moved hi gher buoyed by se- 
lective buying in blue chips and 
speculative interest in machinery 
issues. «... „ , 

The Credit Suisse mdex rose 8J. 
to 603.6 in moderate trade. 

Chemical company Sandoz rose 
SFrlOO to SFrl4J)0Q and Ciba-Geigy 
bearers put on SFr75 to SEY3.850. 

Banks posted modest advances 
and insurers made good gains. 

Paris took heart from the over- 


night steadiness on Wall Street and 
the recovery of tbe dollar. The CAC 
index rose 1-8 to 430 .9 in moderately 
active trade with blue chips, leading 
the recovery. 

Foreign and domestic investors 
bargain-hunted blue chips after a 
recent decline in prices. Cte da Midi 
rose FFr35 to FFr1,388, Peugeot 
climbed FFr29 to FFr1,623 and La- 
forge Cqppee . gained FFr28 to 
FFr1,700. . 

Textile group Prouvo ", object of 
a takeover attempt by Chargeurs, 
rose FFr77 to a year's high of 
FFr581. 

The new share options market 
opened and saw good buying activi- 
ty in Paribas and Peugeot Decem- 
ber call options. 

Stockholm surged to a peak in 
bustling trade. The J&P index 


GOOD GAINS in base metals lifted 
share prices in Toronto in moder- 
ately active trade. 

The advance was led by Alcan Al- 
uminum, which finned C$2% to 
CS44% in busy trading. Cominco fol- 
lowed suit, up C$l% to CS21%, while 
Falconbridge moved C$I% higher to 
C$28% and Inco was ahead C$1 at 
C$27%. 

Blue chips also helped to pull the 
market up. 

Qnariian Pacific gained C$% to 
C$27 a day after the company’s 
president said he expected h i g her 
second half operating profits. 



THE GOLD market in Johannes- 
burg had an uneven day with spurts 
of buying interest and some inves- 
tor caution prior to the release of 
the South African production price 
index and US trade deficit data. 

Among leading gold stocks, Vaal 
Reefs eased B2 to R463 but Rand- 
fontein gained R5.50 to R43350 and 
Kinross was up Rl at R88. 

In the cheaper gold issues, Brack- 
en slipped 20 cents to R7.50 and 
Leslie moved up 35 cents to R7.65. 


A feature of the market was the 
new listing of the gold mine Osprey 
which was issued at 75 cents, 
opened at R2.30 and dosed at R3. 

Diamond share De Beers eased 
35 cents to R52.15 while platinum 
shares followed the mixed trend of 
golds. 







Minings were also mixed with 

Anglo American slipping 25 cents to 

R8B.75 and Gencor adding RL75 to 
R10. 


|§gg|J 



KEY MARKET MONITORS 






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STOCK MARKET INDICES 


new YORK Sept 10 Prev Year ago 
DJ Industrials 2.563.78' 234927 1,879 SO 
OJ Transport 1.018 97* 1.013. B3 782-63 
DJ UtMttes 19915* 199.32 211.35 
S&PCotnp. 317.05* 313.92 247.08 


FAZ-Aktm 6*1.48 633.10 

Commerzbank 1.97330 13480 : 


US DOLLAR 

Sept 10 Previous 


Treasury 


HONG KONG Hang Seng 

3300.96 337734 


LONDON FT 

Ord 
SE 100 
A AB-share 
A 500 
Gold mines 
A Long gilt 
World Act . Ind 
(Sept 4) 


ITALY Banca Comm. 

605.48 60238 


1.7613 1.7561 1317.9 

22532 2249.1 136330 

1,15235 1,15038 81238 

1,265.07 126259 891.49 
448.9 448.6 2973 

10.00 10.04 9.79 

134.72 13534 9930 


NETHERLANDS ANP CBS 

Gen 310.40 30830 

Ind 261.70 25930 


I Previous 
I 1.6610 
i 29650 
I 23375 
) 9.9275 

) 24550 
i 33350 
i 2146.75 
i 61 £5 
i 21785 


September 10 Prev 

Price Yield Price Yield 


7* 1989 38*hi 8344 98 s *. 6.41 

7 1994 9B*%» 925 93'Va 928 

8 ft 1997 94*%i 9.44 94 Ka 9.475 

8 % 2017 92*Y» 9309 92%r 933 

Sourve: Harris Trust Savings Bank 


NORWAY Oslo SE 

563.41 55443 


INTEREST RATES 


SINGAPORE Straits Timas 

1.45730 1.464.10 


TOKYO 

Nikkei 
Tokyo SE 


(S-month offered rate) 

C 

SR 


Sept 10 Pro* 


24,79524 2493733 183193 
204398' 206579 133538 


SOUTH AFRICA JSC 

Golds 

Industrials 


10% 10% 
3% 3% 

4 Yu 4 

8» ffTtm 


AUSTRALIA 

AH Ord. 2,1850 2188.5 12324 
Metals & Mins. 13884 1.3763 601.1 


SPAIN Madrid SE 


30637 30632 


AUSTRIA 

Credit AktlBn 215.42 21538 23933 


3.118-40 3.O87.60 


FFr 8* 8Yn 

FT London Interbank Abdng 

(offered rate} 

3-month liSS 7Vw 7"f<* 

8 -roonth UBS 8 8 * 

US Fed Fond* * 61k 

tlS3-*nontli CD* 7375 

US 3-month T-b&s * 8.64 


Tnwsary tnOtrx 

September 10 

Maturity Return Day's Yield Day's 

(years) Index change change 

1-30 16317 +023 633 -0.03 

1-10 15433 +0.12 636 -003 

1 _ 3 14403 +007 637 -0.03 

3- 5 15737 +0.17 6 71 -003 

15-30 19338 +036 7.78 -003 

Souko: Uerra Lyncfi 


MILLION D-MARK 

(exactly: DM 171,181,000.-) 

.bout 100 Million US. Dollars. Im agine , with every TICKET you buy voi 
26 weekly drawings. You have 26 WINNING CHANCES to become ; 


MILLIONAIRE 


BELGIAN SE 

SE 600830 5.021.40 4.02600 


SWITZERLAND Swiss Bank bid 
69330 68530 


FINANCIAL FUTURES 


COMMODITIES (London) 


CANADA 

Toronto 

Met & Mms. 32456- 3.1297 2.20935 
Composite 33223' 33883 3.096.1 


Sitver (spmfbdngl 
Copper (cash) 
Coffee (Sept) 

04 (Brent Blend) 


Sept 10 Prev 
461 35p 45295p 

£1.09900 El 08500 
£129200 £1,335.00 
518.435 S17375 


1,94081' 1.924 47 1366.77 


GOLD ($/Q2) 


n/a 20438 19632 


FRANCE 

CAC Gen 430.90 439.10 4023 

Ind. Tendance 111 .BO 111.30 9649 


London 
Zurich 
Paris (fixing) 

Luxembourg 

New York (Dec) 


Sept 10 Prev 
*480.00 5457 50 


CHICAGO 

US Treasury Bonds (CUT) 

8 % 32nds ol 100% 

Sept 10 Latest High Low Prsv 

(Sept) 83-27 84-06 83-12 83-08 

US Tfceeevy BBe (imi} 

S.im points of 100% 

(Sept) 9331 9333 9356 8352 

Ce * « ifieat e» of D apom tt ffS) 

Sim points of 100% 

(Sept) n/a n/a n/a 8398 

LONDON 


Corporate 

September 10 Prev 

Price Yield Price Yield 

AT&T Sft July I960 

4PM 6.97 6275 626 

SCOT South Central 10% Jan 1993 

1010 1033 1010 10.63 

Phtbro Sal B April 1996 

8709 1030 86.85 1035 

TRW 0> March 1996 

82.17 10.15 9130 1020 

ArtSO 0% March 2016 

9331 1030 9331 . 1030. 

General Motors 8 % April 2016 

77.B5 1030 7736 1030 


overnight. We have made many Millionaires. 

All prizes are TAX FRE E in Germany. Any prize amount will be paid immediately in any currency. 
STRICTEST CONFIDENCE. Do not delay — Order your tickets) today from your official 
accredited Lottery Agent: , 

CHRISTIAN SCHIPPMANN, EQ Box 70 15 69 
2000 Hamburg 70, West Germany. 


r US $ and £ prices are subject 
to rate of exchange. 

Prices for all 6 classes 
mduding air mail postage 
ml w inning list aner each 

das& No additional chares. 


MrTMrsyMisi 


Please fill in number of tickets you want to order: 

1/l twMs) £ 264, — or, US $ 432,- or DM738,- each 

_____ l/2 ricket<s) £138,— or US $222,— or DM378,— each 
_l 1/4 ucket^s) £ 72,— or US $ 117,— or DM198,— each 



546035 5458 25 
S46030 $45628 


5457.65 5458.10 
547060 546430 


Sim POMS o» 100% 

(Sept) 9251 9232 9238 9238 

Mi i wr H o B m mI W 

£50.000 3anda of 100% 

(Sept) 114-01 114-08 113-28 113-19 


Citicorp 9% March 2Q16 

8532 1100 8532 1100 


Souks ■ Salomon Brottwrs 


• Lama amiable Ogams 


Kindly enclose cheque with your order; 


•£?}!:*> ** 




dimbed 30.8 to 3,118.4 on turnover 
of SKrT25m. 

Blue chips forged ahead with Vol- 
vo adding SKr3 to SKr399. Saab- 
Scania up SKx6 at SKr208 and 
Ericsson SKr2 higher at SKr234- 

Oslo rose to a record on higher oil 
prices and bargain-hunting after 
Wednesday’s technical correction. 
Indications that money market 
rates would go down also helped 
the market, brokers said. 

The all-share index advanced 9.02 
to 420.02 on turnover worth a record 
NKr360m, up NKr70m from the pre- 
vious high set on Tuesday. 

Madrid continued its weak trend 
and dosed lower on light profit-tak- 
ing. The general index slipped 0.45 
to 306.47. 

Ranks moved within wide mar- 
gins as Banestro dropped 45 percen- 
tage points to 1,120 per cent of nom- 
inal value while Popular added 74 
percen ta ge points to 1,860. . 

Milan firmed in thin trading as a 
technical reaction to a ran of down- 
ward sessions. The MIB index 
added 4 to 837 with modest ad- 
vances in most sectors. 

Insurers, which have suffered in 
recent sessions, recovered with 
Generali up L500 at LI22.800 and 
Ras adding L400 to L54.60Q. 


- T 

J - 


U.- '• “ — 






•5l2 K/ iy~ 


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